Why Are People Investing in Crypto and Gold?

Investors are increasingly turning to crypto and gold as a hedge against financial instability. This shift is driven by concerns over government debt and economic policies that may erode the value of traditional currencies.

"Assets of Fear"

Larry Fink, CEO of BlackRock, has noted this trend, describing these investments as "assets of fear." He believes investors are seeking safety due to uncertainties about the future of their money.

Shifting Investments

Fabian Dori, Chief Investment Officer at Sygnum Bank, agrees. He points out that investors are moving away from traditional currencies into gold and Bitcoin, particularly due to the weakening value of the U.S. dollar. However, Dori cautions that Bitcoin's volatility requires careful management.

Economic Concerns

The concerns are not unfounded. The U.S. government's debt is expected to reach record highs, surpassing levels seen in countries like Italy and Greece. The International Monetary Fund (IMF) predicts that the U.S. budget deficit will remain high for the next decade, fueling investor anxiety.

Changing Perspectives on Crypto

Larry Fink's views on crypto have evolved significantly. In 2017, he was skeptical, but now he sees cryptocurrencies as a valid investment option. He believes crypto, like gold, can serve as an alternative asset for investors worried about economic instability. With BlackRock managing trillions in assets and operating one of the largest crypto ETFs, Fink's opinions carry considerable weight in the market.

The Evolution of Bitcoin

Nic Puckrin, a crypto analyst, notes that Bitcoin initially emerged as a response to the 2008 financial crisis. However, it has since evolved into a bet on the future of blockchain technology and a new financial system. Despite this, uncertainty remains about crypto's volatility and its performance compared to gold.