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Deutsche Bank: Investors Increasingly Choose Bitcoin Over Gold to Hedge Dollar Risk, Inflation.


Deutsche Bank’s strategist Jim Reid reportedly wrote that investors are increasingly demanding to use bitcoin instead of gold to hedge dollar risk and inflation. His research concurs with one recently published by JPMorgan’s analysts that shows institutional investors moving from gold to bitcoin.

Investors Replacing Gold With Bitcoin
In a report discussing the performances of several investments post-vaccine news, Deutsche Bank’s research strategist Jim Reid wrote that “One of the oddities has been the dramatic divergence between gold (-3.6%) and silver (-4.4%) on the one hand and bitcoin (+13.4%) on the other,” according to Zerohedge publication. Reid elaborated:
See full article here https://news.bitcoin.com/deutsche-bank-bitcoin-over-gold-hedge-dollar-risk-inflation/
Do you agree with Deutsche Bank?

When you consider both assets over the past 10 years; Gold has sufficiently hedged against inflation, Bitcoin has done this as well, but not only is it dis-inflationary, it also has shown great price appreciation over the years, making it a viable long term investment option, definitely something that a person who holds gold would want to own in their portfolio.

Comparing this Deutsche Bank reoort with the JPMorgan report there seems to be fresh interest in Bitcoin from financial investors, I'm not sure it indicates they are dropping gold for Bitcoin (and I don't think it actually matters) as most investors are already very dip into gold, as such we should not expect huge money inflows as we can see in Bitcoin which is relatively still very new.

People who had invested on gold and bitcoin were on the safer side. The people's mind has changed and slowly they're losing the trust over the banking system. Right now the banking system needs more progress, because specific procedures were followed but those doens't fulfill the modern generation. This is where bitcoin takes the lead, once bitcoin and cryptocurrencies were mentioned for lack of liquidity. Now it is capable to perform almost 60% as gold. This is the reason why investors prefer bitcoin over gold.

In our corona days people are much friendly to risky investments. And dont forget about FOMO, we currently and bull market and bitcoin is growing really fast

There is a good reason for investors to sideline Gold and choose bitcoin over it. Bitcoin has outperformed all other assets in terms of ROI in the last decade. No other assets were able to provide as much as return like bitcoin did. Also Gold are used by the conservative investors whose main priority is to protect the capital. Bitcoin can go to any direction at any given point of time, so the risk is higher here so as the reward. The recent increase in interest from the institutional investors also prove this point!

the shift from traditional assets to bitcoin has been happening for some time now. when you see the news of it hit the media that is when you know that the shift has become too big to ignore since so far they have been pretty much ignoring bitcoin thinking it will go away if they do so. but as it was expected, bitcoin is growing stronger every day as its adoption all around the globe increases. all because what bitcoin offers is one of a kind and can not be found anywhere else.

I don't know if the report is true, but investors are focused on profits, and since Bitcoin is clearly on the rise, they probably don't want to be left behind (especially since we're entering the global economic crisis, so they want to salvage what they have). It's a fact that Bitcoin is currently going better than gold, but I'm sure many traditional investors would still stick to the latter because it's also more stable. Bitcoin is $18k+ now, but it can easily be $15k tomorrow or $10k in a month. There's high potential, but also igh risk involved. With gold, on the other hand, you might lose some or win some, but not by a lot.

This is very interesting, I always thought that those that had the most money will choose gold and silver over bitcoin because of their long story of being a store of value and being a hedge against inflation, but it seems that they are not afraid of taking a risk with a technology that is only 10 years old, this is really interesting because if this becomes a tendency it is possible that bitcoin could steal some of the market cap of gold and if that happens the price of bitcoin could skyrocket.

Agreed, no big media talk or discuss anything positive or the reality with bitcoin. All the news that can be heard out through big media is the ransom requested in terms of bitcoin. When people watch this, automatically the mind believes bitcoin is developed for such kind of activities.

Without doubt media play a big role in growth, but bitcoin is exceptional even without any support of media it has reached big through the spread happening through the users.

Investors could have been in the game much earlier than everyone thought, and it's just now that they are becoming more and more public about it since bitcoin has been hitting the news lately due to its dramatic increase despite having been around a year of setbacks for most investments and other economic oopsies. Also, it's not really surprising that more and more investors are choosing to make the risky play. The acquisition of huge numbers of bitcoins by Square Inc. and co., and PayPal accepting bitcoin finally are enough confirmations for them to take the risk. Gold and silver would still be viable in the long run, but would be less profitable given how strict the market is. Investors are now looking to make money out of the extreme volatility, which they have been pointing out for the longest of time as bitcoin's biggest flaw for it to become a viable investment.

It doesn't matter if we agree or disagree with the report. But it's pretty obvious by now, bitcoin, in the best asset during the pandemic and that is enough to say that wise investors are really looking into it specially that the price is hovering around $19k and close to it's all time high.

There could be some gold bugs who doesn't want to acknowledge bitcoin and think that it will be gone in 2020, but it is not. So many of them are thinking of not shifting, but at least have bitcoin in their portfolio now, win-win situation for them and for us.

I'm new to the forum, so hello to everyone.

I came into a little bit of money in 2018 and wasn't sure where to invest it. After a fair bit of research I decided in early 2019 to invest about two-thirds of it into crypto (mainly bitcoin) and the rest in gold/silver. Though gold/silver has increased in value by about 50ish% since then, I now regret not investing it all in crypto. I mean, I was first in at bitcoin for 3.6K US dollars, so maybe you'll understand my opinion given that it's now currently above 18.5K (a 500% profit).

I do still think that the precious metals are destined to be valued much higher than they are now, but not until AFTER the stock market collapses for the 2nd time (since March of this year) with interest rates staying close to zero or becoming negative, alongside continued QE. However, knowing what I know now, I would invest ALL money in crypto until towards the end of 2021 - unless the aforementioned happens. Indeed, I'm always contemplating whether to keep my gold/silver investments as a hedge against crypto disaster or sell and make more money with crypto.

As the football pundits on Match of the Day (England) say, these are nice problems for 'a manager' to have.  ;D

If they invested in both then I think that they might be truly on the safer side. I do not invest in only one investment path, I always try to diversify my portfolion. In my opinion, suddenly switching to only one investments is not a good thing because at the end of the day, bitcoin is still inherently volatile and people seem to forget about it when they do something cryptocurrency related. Gold on the other is expensive in itself, most golds that are bought needs storage fees to prevent theft or loss which could undermine the price you paid just for maintenance.

I am not surprised by this kind of news, it is in line with many others we are seeing lately. I am even less surprised by this coming from the Deutsche Bank, since Germany has quite favorable legislation for cryptocurrencies, at least compared to other European countries. Especially interesting is the fact that the idea that bitcoin is better than gold/is going to replace gold, is appearing a lot lately in the media.

Let's take a moment to acknowledge that it's not the mainstream investment banks who are supporting bitcoin, but rather their investors who are gravitating to better returns and the investment banks finally conceding and trying to figure out how they can make fees off bitcoin transactions or off the assets under management.

This old system is finally having to recognize bitcoin! And they can't deny it so they must come out as supporters of it! We're changing the world.

Just a bit more proof that investment banks are taking the "if you can't beat 'em, join 'em" position on Bitcoin....

Goldman Sachs names Head of Digital Assets - Aug2020 (https://www.cnbc.com/2020/08/06/goldman-names-new-head-of-digital-assets-in-bet-that-blockchain-is-the-future-of-financial-markets.html)

Banks coming back for Bitcoin - Financial Times - Feb2020 (https://www.ft.com/content/e4369c82-4369-11ea-abea-0c7a29cd66fe)

Yeah, Germany of all the EU countries is pro bitcoin so no surprised that they have made their report public and let everyone specially gold pundits that a shift in paradigm is happening right now. Maybe the old and traditional farts are now realising that they can't simply put the noise that bitcoin or crypto is making this year.

Let's see the numbers in 2020 as we draw closer to a new all time high, there could be lots of money flowing in, including from the gold investors.

Currently, many investors prefer to invest in bitcoin rather than gold. The simple reason is that Bitcoin is becoming a human finance liberator and inspiring a variety of new creations in the crypto-asset sector. Bitcoin is systemically a platform that features blockchain technology and promotes transparency, immutability, credibility, democracy and freedom. These values are the pillars of support that Bitcoin provide to Investors.

To my opinion investors in gold and Bitcoin are two different types. Gold investors are more traditional and not so prone to ridk and new technologies.
However this COVID crisis has changed a lot and people shifted more to online world and virtual assets so some investors probably changed their habits and attitude too and Bitcoin might get advantage over gold.
I still think that is good to diversify investment and combination of gold and Bitcoin is good investment plan.

Well, we have seen this trend many times before since the inception of bitcoin. But right now, it seems like there is too much happening right now in the financial areas right now that big media has no choice but report about it. It has been a long time that they have been ignoring and not giving Bitcoin and other cryptocurrencies its due but with the pandemic helping investors switch from traditional assets to cryptocurrencies. As far as cryptocurrencies are concerned, we are living in interesting times.

Looks like bankers finally understand that bitcoin is a nice purchase in the 21 century

The Deutsche Bank report isn't new to every Bitcoins investor, though it boosts people's awareness of Bitcoins and it contributes only to possible mass adoption.  However, golds and silvers are still the same as Bitcoins for both can still be considered as a safe haven for an asset the only thing that made Bitcoin's differ from the others is that bitcoin is a decentralized currency and because it has a limitation on the numbers of coins that can be mined that gives better value compared to the traditional one like gold where resources are abundant.

Radicalism makes people think that Bitcoin can surpass the quality of gold when it comes to value and as an asset due to its resources and abundance.

Bitcoin can surpass the gold but this does not mean that gold is not a valuable asset. If anyone is a millionaire and want to invest , he can divide his portfolio in both bitcoin and gold as both of them are safe heaven for store of value.

Gold doesn't work anymore for most people because it can't be exchanged fast.

You can't go to an ATM and exchange it for money or meet up a trader through facebook or localbotcoins and get cash.
Gold contracts have to go through a bank or paypal and physical gold is hard to sell and you have to make sure you're not buying fake.

Bitcoin is much better. Its only downside used to be volatility but as it matures it becomes less volatile.

This is a reality that is so latent that it will occur at any time around the world. Bitcoin is allowing to give this great boost of digital technology. I agree with Deutsche Bank sooner rather than later, Banks will have to adopt Bitcoin because users are already accepting it and only they will be missing.

It is not the bank itself that is demanding this but their investors, if it it was up to the bankers they will never allow their investors to deal with bitcoin because they know that sooner or later they are going to lose them, but they have no option, investors want the ability of using bitcoin and their work as a bank is to give them what they want or they will leave for another bank that is willing to do it, so this is the beginning of a very interesting dynamic in which bitcoin will begin to erode banks from the inside.