Bitcoin has hit a new record high above $64,000 (£46,700). But while bitcoin has more than doubled this year, gold has disappointed, notes John Authers on Bloomberg. That’s odd given the “historic amount of money printing” and talk of coming inflation. Dhaval Joshi of BCA Research thinks bitcoin has stolen gold’s thunder by emerging as a new “anti-fiat” asset: investors looking for protection against inflation increasingly turn to digital currencies. “Circumstantial” evidence suggests that some of the money that big investment institutions have pulled out of gold since last November may have flowed into the cryptocurrency. Yet bitcoin’s high volatility and periodic crushing losses are hardly the hallmarks of a store of value.
Bitcoin’s $1trn market cap is still smaller than the $2.5trn of privately held gold, says Daren Fonda in Barron’s. Bitcoin would have to hit $146,000 for the market capitalisation to match that of gold. But will governments really tolerate a “freewheeling digital token” that undermines their own currencies? China has already stopped banks from making transactions in bitcoin and closed down crypto-exchanges, while India is contemplating an outright ban. Stock prices ultimately depend on earnings and gold has applications in manufacturing and jewellery. Yet bitcoin’s value is purely speculative: as long as people believe it can one day supplant the dollar or gold they will keep on buying.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
State pension could rise to £12,600 next year - dragging millions into paying taxThe triple lock could trigger a 5.5% increase to the state pension in April 2026, economists suggest. This means the full state pension will breach the tax-free personal allowance
-
Stocks and shares ISAs beat cash ISAs – is it time to start investing?The average stocks and shares ISA returned almost 12% over the past 12 months, versus 3.8% for the average cash ISA. As Rachel Reeves considers cutting the cash ISA limit, is it time you started investing?
-
Renewable energy investing: who is paying for the green revolution?Investors in renewables have not been rewarded, says Bruce Packard. Will they fund the government’s plans?
-
The best ways to invest in Vietnam – Asia’s communist dynamoVietnam has long been one of our favourite markets. The prognosis remains auspicious, says Alex Rankine.
-
India is a new global powerhouse — should you invest?India’s growth rate has slowed recently, but there is still ample scope for investors to benefit from its development.
-
Why Chinese stocks are so far out of favourThere’s little appetite for Chinese stocks despite low valuations.
-
Three companies that dominate their markets with critical productsA professional investor tells us where he’d put his money. This week: Charlie Huggins, manager of Wealth Club’s Quality Shares Portfolio, picks three stocks.
-
Should you continue to hold Smithson Investment Trust?Opinion Smithson Investment Trust, a small- and mid-cap fund, has struggled to live up to lofty expectations, says Rupert Hargreaves.
-
Primark owner Associated British Foods is an overlooked gem going cheap — should you buy shares?Associated British Foods, the owner of Primark, is a family-owned business, which means it is passed over by the increasingly popular passive investment funds. That spells opportunity for private investors, says Jamie Ward.
-
Trump's tariffs and a shrinking market for alcohol deal double blow to DiageoDonald Trump's tariffs are a further headache for drinks giant Diageo, which is already being buffeted by a decline in alcohol consumption.
