Bitcoin (as well as other cryptocurrencies) has really been the alternative asset of choice for the new generation of young investors. Indeed, with firms and various governments warming up to crypto as a serious asset class, perhaps it’d make sense to own a small piece, either directly, via some sort of Bitcoin exchange-traded fund (ETF), or even some sort of proxy (think the crypto infrastructure or brokerage stocks). And while there are similarities between Bitcoin (and other cryptos) and gold, I’d caution investors from getting rid of the shiny precious metal for digital currencies. Bitcoin can go bust in a painful way when stocks do. Gold tends to be a better hedge against such rainy days.
Indeed, it’s when stocks are heading south and the bear market returns that it matters the most. And though I’m not a crypto bear, I think investors should be more inclined to view Bitcoin as a speculative asset that could soar or plunge overnight. As for gold, it’s an asset that’s been tested over the millennia. Indeed, Bitcoin hasn’t quite been around that long! And that’s why I think the case for owning gold is shinier than the case for overweighting Bitcoin and any other crypto that’s hot.
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Owning Bitcoin and gold can be a good idea, but gold, I think, shines brighter!
Arguably, I think there’s nothing that’s stopping investors from owning both Bitcoin and gold. They’re two separate assets, after all, that I think complement each other quite well. Of course, this piece is concentrating on the hedging benefits. And when it comes to hedges, I believe that gold, gold miners, or some sort of gold bullion ETF glimmers more than anything that the crypto market has to offer, at least in my opinion.
Gold is in a hot run of its own of late. And some would argue that it’s also becoming more of an overheated speculative asset. Though gold isn’t immune to corrections, bear markets, or worse, I just think that how the asset behaves in stock market plunges makes the asset a more dependable hedge.
That’s why I think going for gold is the best bet as 2025 comes to an end. But what’s the best way to play continued strength in the price of gold?
Mining for opportunities with gold miners
I think it’s really hard to go wrong with the miners. Barrick Gold (TSX: ABX) is a premier gold miner that I think still trades at a nice discount. Shares go for 14.2 times forward price to earnings (P/E), which is quite modest, especially when you consider the bullish 70% past-year run and the more than 102% gain on a year-to-date basis.
Given the potential for gold to rock even higher due to macro aspects poised to keep working in its favour, I think ABX stock is a prime buy at these levels, especially as it takes advantage of new exploration opportunities while selling other assets to raise considerable capital.
Is it really a golden opportunity to buy ABX stock? I think it might be. With strong momentum, a sound 1.74% dividend yield, and a low 0.43 beta, shares represent a dependable hedge. I can’t say the same for crypto.
