With many believing that the dollar’s days are numbered, the first question that often comes to mind is what is the alternative. Precious metals and cryptos are 2 of the primary candidates, but which one to choose?
There are ardent supporters of each, with pros and cons to either investment. Today we’ll consider a few of those, and as always allow you to decide what makes the most sense for your own situation.
On one hand, gold and silver have a track record that goes back thousands of years, whereas Bitcoin and the cryptos are a decade old or less. Certainly the precious metals crowd likes to point to this, although keep in mind that the internet was new before we knew about it, and just because something is new doesn’t mean it can’t be adopted quickly.
Additionally while gold and silver do have a great history, I often wonder how many people outside of the precious metals crowd are really aware of it. Which doesn’t mean it isn’t there, but I’m guessing that somewhere north of 90% of the planet knows very little about the history of metals OR cryptos.
Which is perhaps another way of saying that if we see a crash in the market, most of the people who are panicking to get into safer assets aren’t probably going to suddenly investigate the London Gold Pool or why Nixon took us off the gold standard.
Over the weekend goldmoney.com analyst Alasdair Macleoud (who I like his research and greatly respect) was saying that cryptos were too volatile to be money. Certainly there has been volatility, but anyone who is buying gold and silver by nature expects a great deal of future volatility if they’re expecting a big move higher like I do. So by the time gold and silver could be revalued and used as money, they would also be considered volatile.
Lately I’ve been wondering whether what we consider money or not is even as relevant as thinking about what people are going to actually do. My guess is that when the next market crash occurs both metals and cryptos will do extremely well at some point (although it’s worth keeping in mind that both could trade lower in the short-term, much like what happened to mining stocks during the last crisis before they eventually traded higher).
Personally I own both silver and cryptos, although a much higher percentage of that is dedicated towards metals. These are some of the factors I’ve been considering, and I’m always open to hearing new ideas.
Although perhaps in the end having a mix of both is a good way to go, as one thing I feel pretty confident about is that I’d much rather take metals OR cryptos than hanging onto the incredibly debased paper currencies.