As a conventional inflation hedge, gold failed investors in 2021, having its poorest year since 2015.
According to Wharton’s finance professor, Bitcoin (BTC), the world’s most valuable cryptocurrency, has replaced gold as an inflation hedge for youthful investors.
In a CNBC Squawk Box interview on Friday, Wharton School finance professor Jeremy Siegel remarked that gold’s performance in 2021 was “disappointing.”
BTC, on the other hand, is becoming more popular among younger investors as an inflation hedge, according to Siegel:
“Let’s face the fact, I think Bitcoin as an inflation hedge in the minds of many of the younger investors has replaced gold. Digital coins are the new gold for the Millennials. I think that the story of gold is a fact that the young generation is regarding Bitcoin as the substitute.”
Siegel also pointed out that older generations saw gold skyrocket during the 1970s inflationary period. “This time, the odds are stacked against us,” he continued.
Gold, which has traditionally been seen as an inflation hedge, failed to fulfil investors’ expectations in 2021, having had its worst year since 2015 and falling approximately 5% to conclude the year at $1,800. Despite enormous price volatility throughout 2021, BTC had increased by roughly 70% by the end of the year.
