Gold Tops Safe Haven Assets, According To Bank Of America—Can Bitcoin Compete?

For years, the financial community has debated on the best and safest investment during uncertain times. For most conservative traders and investors, bonds are an obvious choice. But for the younger set and tech-savvy individuals, Bitcoin is a better option. Despite fiscal challenges and current global economic trends, gold remains the best bet for analysts at Bank of America.

According to Bank of America, gold remains solid, regardless of falling or even higher interest rates. Interestingly, the bank is silent on Bitcoin’s role in the financial markets. However, many leading American banks are starting to get friendly, with Bank of America’s Merrill Lynch and Wells Fargo offering Bitcoin ETFs to their eligible clients.

WOW: Bank of America today: Gold is the ‘last safe haven’ as treasuries face RISKS with USA debt.
They are recommending central banks & traders increase exposure #Gold #Silver #SilverSqueeze pic.twitter.com/XIp7aAYYrx

— Make Gold Great Again (@MakeGoldGreat) October 17, 2024

Bank Of America: Gold A Better Hedge Against Inflation

Bank of America analysts say gold remains a prime choice in the current economic landscape. While the bank includes Bitcoin and the blockchain in conversations, it remains cautious. The bank adds that gold is a logical choice for investors and central banks, while gold is a better hedge against inflation and highly volatile currencies.

Also, gold is seen as a better investment than Bitcoin since many expect crypto to potentially fall, especially due to the reported US PPI inflation of 1.8%, which is up from the expected 1.6%. An increase in PPI means that inflation will put pressure on the economy, which in turn may motivate the Federal Reserve to increase interest rates. Since there are still economic uncertainties, gold has become a reliable investment.

Gold Seen To Hit $3,000 Level

Bank of America estimates that gold prices can reach the $3,000 level. This prediction is backed by the planned policies of the two US presidential candidates, Donald Trump and Kamala Harris. Both candidates support fiscal expansion, thus boosting spending.

The bank estimates that spending can grow 7 to 8% annually by 2030 due to the candidates’ pledges to support defense, climate, and demographic policies. And if the market continues to assume more debt, an increased market volatility can push more investors into gold.

Many central banks are also diversifying and boosting their reserves. Reserves have increased from 3% to 10% over the decade, and demand from Western investors has risen recently. In short, the Bank of America sees gold as a better long-term safe investment.

BoFA Remains Cautious On Blockchain & Bitcoin

Like many financial institutions, Bank of America is slowly embracing blockchain’s potential. Bitcoin is being recognized as another alternative to gold as a hedge against inflation. Blockchain’s decentralization and capped supply also make it an ideal investment vehicle.

Now that Bitcoin and altcoins are growing in popularity, it’s only a matter of time before top banks like Bank of America include them in their investment strategies.

Featured image from CryptoTab Browser, chart from TradingView