Gold & Bitcoin V.S. Inflation

Inflation, gold, and bitcoin (and other cryptocurrencies) have been frequent features of the Chaim Investment Advisors podcast over the years. This time, we’re talking about the way that gold & bitcoin interacted with inflation during this piece of the cycle where inflation has been at historic levels in the United States.

It turns out that, for many of the reasons we described at the very beginning of this cycle in “Stocks & Inflation,” gold, other commodities, and Real Assets as a category did better at hedging inflation than Equities, Fixed Income, and Financial Assets as a whole. We explain the asset pricing phenomena behind the divergence between bitcoin, gold, and inflation in the context of other conversations we’ve had around these topics in the past.

As always, this doesn’t mean that you should go out and sell your bitcoins for Krugerrands today. We found this an interesting lens to look at the way different assets react to macro-phenomena that we’ve been discussing on this podcast for years now- monetary policy, interest rates, and demographics, among others. Also, as always, past performance doesn’t predict future results and we may, of course, be at the very end of this cycle at any moment. Timing the market remains as notoriously difficult as ever.