As the financial markets strive to rebound from what has been a hugely trying and tumultuous period, courtesy of a deadly global pandemic, we may need to brace ourselves for yet more trouble ahead.
“Now factor in over $10 trillion in global economic stimulus, as well as increases of 26% in the M2 money supply and 78% in the Federal Reserve’s balance sheet over the last year, and the lack of sustainability becomes readily apparent,” says alternative investment pundit Thomas Neptune, Esq.
Due To The Heightened Level State Of Uncertainty In The Current Climate, Many Investors Are Already Increasing Allocations To Alterative Investment Vehicles Like Cryptocurrency, U.S.
It can be used as a medium of exchange for some goods and services, but there has not been universal acceptance of Bitcoin as a form of payment.
Theoretically, the price could plummet to near-zero if demand shifts elsewhere or regulators step in with force, although Bitcoin has institutional traction and its loyal following is most likely here to stay.
What might have been shocking news only a few years ago, even college endowments like Harvard, Yale, Brown and others have been placing bets on Bitcoin as have influential business leaders such as Elon Musk.
As an inflation hedge, Bitcoin does not have a long track record, as it was created in 2009 just prior to a market expansion where we saw little inflation for the last decade.
This is a significant development as there are over one billion active iPhones and these crypto-wallets can automatically settle transactions in the users’ currencies, potentially eliminating the risk of price volatility for transactions.
Collecting financial artifacts of various civilizations has been in high demand for over 2,000 years, from when wealthy Romans were collecting Greek coins up to the present day.
Further, there is immense passion and competition to own the best trophies—why this market is known as the Hobby of Kings—which has evolved to sport for the affluent to locate and own these elusive artifacts in a private market.
rare coin market has benefited from numerous advances in technology and other innovations, most recently the introduction of the two major certification companies in the 1980s, followed by the ubiquity of the Internet in the 2000s.
rare coin market can be a safe diversification tool for those seeking an inflation hedge, largely based on historical price appreciation data from the last 125 years.
Further, there are no reporting requirements for owning these assets, which makes them extremely private and can be a great way to retain wealth outside of the banking system in case of a financial meltdown or digital economy.
It is globally-accepted that gold is a non-correlated, flight-to-safety asset during times of great uncertainty, such as The Great Recession of 2007-09 or the current global coronavirus pandemic.
For the retail investor, it is clearer than ever that fiat currencies will continue to decline as governments print an unlimited supply of money to monetize their debts.
Gold is known as an inflation hedge, which to some extent creates a self-fulfilling prophesy—as inflation expectations increase, institutions purchase gold and the increasing spot price protects their purchasing power.
The utility of owning physical gold is primarily as a store of value where the owner maintains direct control and access to a tangible asset.
All three of these “coins” have either a finite or slowly increasing supply, making them very attractive during times of economic uncertainty, as even relatively small increases in demand can move prices higher.
Bitcoin is fun and people are speculating on its tremendous upside, whereas gold bullion is highly liquid and has a long track record as an inflation hedge.
Since many financial advisors don’t yet know how to access or offer these types of alternative assets, they simply aren’t included in the investment mix and, thus, clients can’t reap the benefits—ostensibly suffering opportunity loss.
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