According to ByteTree CEO, gold and Bitcoin will be important components of an investment portfolio for years to come. CEO Charlie Erith explains why.
“Gold and Bitcoin will be important components of an investment portfolio”
Charlie Erith, Lead Portfolio Manager and CEO of research-focused investment consultant ByteTree Asset Management, shared his views on the markets. Erith wrote about the importance of gold and Bitcoin as protection against monetary policy mistakes. As you can follow on Kriptokoin.com, there were claims that gold and Bitcoin were good inflation protection. However, it is clear that Bitcoin could not fulfill this task at the peak of inflation.
ByteTree was founded in 2014. The company offers investment solutions on gold and silver, as well as Bitcoin and other cryptos. It also provides enterprise-grade crypto-asset data. ByteTree CEO says:
At ByteTree, we believe that gold and Bitcoin will be important components of an investment portfolio in the years to come. Not because they are guaranteed to rise. After all, we don’t know the future. But in an inflationary age, they serve as a hedge against policy error either way. Very loose, you have your own Bitcoin and very tight, you have your own gold.
Charlie Erith: There’s an uneasy truce!
According to the ByteTree CEO, economic activity is slowing, harvest production is increasing, and commodity prices are cooling, which together seems to have allayed inflationary concerns for now. Erith says the market is starting to get encouraged that the battle against inflation has been won. He also states that the cycle of interest rate hikes has come to an end. However, he also notes that this was an uneasy truce. In this context, Erith makes the following statement:
On the one hand, if policymakers loosen on tightening measures, they will suddenly rekindle inflationary pressures. The danger is that the Fed and other central banks will convince themselves that the war has been won. And so they change the direction of the monetary journey. At this point, inflation will start again. Perhaps the bountiful harvests will not be so good next year. On the other hand, it is clear that even current conditions are causing a major economic downturn.
“Central banks face a difficult choice”
For this reason, according to Charlie Erith, central banks face the difficult choice of crashing the world economy or feeding the inflation tiger. Erith says the political implications of the former are hard to digest. In this regard, he continues his explanation as follows:
This indicates that any evidence of inflation under control will be jumped on and policies will be relaxed. Since inflation is essentially a monetary phenomenon, it will not go away under these conditions.
In April 2022, ETP provider 21Shares and ByteTree launched the “21Shares ByteTree BOLD ETP”. Erith says it’s “the world’s first ETP to blend Bitcoin and gold.” He also notes that it serves as an inflation hedge by tracking an index of Bitcoin and gold. In addition, it states that it aims to rebalance each asset on a monthly basis according to its adverse historical volatility.
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