Both Bitcoin and gold have surged as the US Congress is debating over the further stimulus program to support the economy amid the pandemic. Nevertheless, a major investment bank is recommending the cryptocurrency over the metal.
Oppenheimer Analyst Says Now Is the Right Time to Invest in Bitcoin
On Tuesday, Bitcoin touched the highest level in about 11 months, which is a big deal considering that it has been moving sideways for the last two months or so.
Elsewhere, gold has broken above the nine-month peak and hit an all-time high. Investors are rushing to put their money into safe-havens as geopolitical tensions continue to worsen while fears of a second wave of pandemic persist. On top of that, most economists expect central bankers and governments to push for further stimulus measures and encourage an inflationary bias.
While most traditional investors are betting on the metal on the premise that it is more reliable amid global crises like this, investment bank Oppenheimer is more bullish on Bitcoin. Ari Wald, head of technical analysis at the bank, told CNBC “Trading Nation”:
“We’ve been recommending gold as a way to play the expansion of the [Federal Reserve’s] balance sheet. It’s actually the high momentum commodity, it ranks highest above all commodities out there in terms of momentum.”
Still, Wald added, “We do recommend sticking with it but I think it’s worthwhile to highlight bitcoin instead which isn’t as extended.”
The analyst argued that Bitcoin had experienced a major breakout, which could secure more gains for it in the longer-term. He noted that the cryptocurrency was reversing its downtrend that started at its 2017 high.
“If you are a long-term holder, this is the type of action you’d like to see,” he concluded.
Bitcoin is still far away from its record high at about $20,000, suggesting that it has much room for growth.
There Are Different Opinions As Well
While Bitcoin has performed better this year, some investors would still pick gold. Michael Binger, president of investment advisor Gradient Investment, said that he would go for the metal instead of Bitcoin. He stated:
“Between the two I would really lean on the gold side here. When you think about it, it is really a Goldilocks environment for gold investors right now. I mean, you have a weak U.S. dollar, you have negative real interest rates. All of this is based on the prospect of rising inflation.”
While Binger admits that the cryptocurrency is a momentum play, he says that it is not a “valid currency yet.”