At least that is the advice given by one Crypto Analyst.
Yes "Crypto Analyst" is kind of a new term in financial markets, but there are a few self described ones out there.
Which brings me to Brian Kelly of CNBC's Fast Money, Crypto Analyst and Hedge Fund Manager.
He stated on CNBC Friday evening that investors should look to bitcoin to hedge against a possible trade war.
Cool, but why are we even talking about trade wars?
If you haven't heard, President Donald Trump announced a 25% tariff on steel imports and 10% tariff aluminum imports that would go into effect next week.
Though his thoughts seemed to be in the right place, the results thus far haven't been pretty.
The stock market has sold off over a 1000 points and Economists and Countries alike have weighed in with their displeasure over the announcement.
Basically saying that at the very least, it will do more harm than good, if not destroy more jobs than it creates and plunge the US into a recession.
Why bitcoin makes sense?
In the past, in times of trade wars, hard assets have done much better than currencies according to Kelly.
Specifically he had this to say:
"In this environment, I want to own those things that are deflationary and fixed supply in an inflationary environment. And look at what bitcoin has done the last couple of days."
Bitcoin is up about 7% on the week:
(Source: https://www.coinbase.com/dashboard)
Not bad considering stocks are off about 4% and gold is down about 1%.
Which brings me to his next point.
According to Kelly, and many others, bitcoin is the new gold, digital gold.
Traditionally, gold has done well in times of turmoil. Kelly fully expects bitcoin to behave the same way.
Specifically he had this to say regarding bitcoin replacing gold as a store of value:
"But you know what, now we have bitcoin. Bitcoin has a fixed supply. It acts exactly like a hard asset, exactly like a commodity."
"In the trade war, it does well."
He makes a good point and I can't say I disagree.
As I type Bitcoin is continuing to march upwards now getting near $11,500.
Stay informed my friends.
Image source:
http://fortune.com/2018/03/01/bitcoin-price-sec-ico-crackdown/
