Are cryptos and gold a safe haven during inflation?
Asked 4 years ago
If inflation becomes a problem for the dollar, does that imply that crypto and gold will be reliable option for the time being? Of course, I'm considering them as an option while inflation settles down, namely within 2-3 yrs. If anyone has knowledge in the field, I'd love to hear some answers. Thank you in advance
Andrew Moran
Tuesday, June 22, 2021
Right now, it is difficult to determine if cryptocurrency is a reliable investment during times of inflation. It has yet to have any experience in an inflationary environment in advanced economies. The jury is still out, but the early performance during the current wave of inflation is not looking good.
When it comes to gold, the yellow metal is one of the best investments to hold during times of inflation. But silver is just as good.
The early numbers highlight greater inflows into gold and silver investment funds, so there is institutional demand with the U.S. annual inflation rate hitting 5%.
Of course, at the same time, if the Federal Reserve starts raising interest rates to counter the higher inflation, it would negatively affect gold since it would lift the opportunity cost of holding non-yielding bullion.
Whatever the case, you should always hold gold (physical and paper) in any environment.
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