Gold and Bitcoin (BTC) could become larger and more prominent players in the financial markets if investors start picking them up and replacing other assets on their portfolios. According to the recognized investor Dan Tapiero, we are witnessing the beginning of the end of government bonds as a productive asset class.
Gold and Bitcoin Could Replace Government Bonds
During the last Coronavirus crisis that expanded all over the world, economies have been certainly affected. Some economies will be falling between 5% and 10% during this year. Indeed, this is going to be the worst crisis since WW2.
Due to this situation, government bonds are currently trading at yields lower than 1%. This is according to a recent report released by Deutsche Bank where they show that most bonds are offering negative or yields close to zero.
Furthermore, Dan Tapiero stated that this could be the end as government bonds working as an asset class. Moreover, he mentioned that portfolio managers will have to search for a new defensive asset to replace these bonds. Among these assets that can gain relevance we find Bitcoin and gold.
On the matter, Tapiero wrote:
“Nothing more bullish for Gold and Bitcoin. [This is the] Beginning of the end for govt bonds as a functioning productive asset class. Traditional 60/40 portfolios will need to find a new defensive asset to replace portion of the 40%. Gold is the most liquid best defensive asset that exists.”
Beginning of the end for govt bonds as a functioning productive asset class.
Traditional 60/40 portfolios will need to find a new defensive asset to replace portion of the 40%.
Gold is the most liquid best defensive asset that exists pic.twitter.com/fKy5EUZ2Jr
— Dan Tapiero (@DTAPCAP) June 4, 2020
Mr. Tapiero has been working with the most recognized investors in the market and has provided great returns to them as a portfolio manager. His views on the future of Bitcoin and gold are certainly very important. As he explained, investors will not be investing in assets that will provide negative or very low returns.
Bitcoin has been growing as the most popular cryptocurrency in the world and it has also been expanding as an alternative investment tool for many investors around the world. Bitcoin is a volatile asset, that’s clear, but many experts and analysts consider that there is a massive bullish trend in the long term that would take the price of Bitcoin towards new highs.
Currently, Bitcoin is being traded around $9,800 and it has a market capitalization of $180.11 billion. In the last 24 hours, BTC expanded by 1.33%.