Choppy swings in Bitcoin prices have raised questions about its inclusion in an investment portfolio, while gold continues to play the role of an inflation and stock-market crash hedge. This is the view of Societe Generale’s analysts, CNBC reports.
Experts warned that building a regulatory framework for cryptocurrencies constitutes a ‘big threat’ that could sustain downside pressure on their prices.
Analysts deemed the direct comparison of gold and its digital counterpart incorrect.
“We agree that investors view both assets as an alternative to fiat in the face of unprecedented monetary and fiscal stimulus. But in the absence of cash-flow generation, the only reward for Bitcoin and gold is their price appreciation. That is the only thing they have in common,” the analysts wrote.
Societe Generale said it recommends a 5% allocation to the precious metal in model portfolios.
“History shows that, over time, the price of gold is closely linked to real yields on bonds”, — the analysts concluded.
Earlier, JPMorgan analysts projected Bitcoin sales and a shift into gold by institutional investors amid the current correction. In the long run, they say, the price of the first cryptocurrency could reach $146 000.