Main Points:
- Panel discussion from WebX 2024 focused on Bitcoin, gold, and stocks as investment options.
- Experts debate the advantages of each asset class, focusing on their unique characteristics.
- Discussion on ideal portfolio allocation during different economic cycles.
- The impact of the U.S. presidential election on these asset classes.
At WebX 2024, a global conference on cryptocurrency and finance, a panel discussion titled “Bitcoin, Gold, or Stocks: Which Should You Invest in Now?” was held, featuring experts in each of these asset classes. The discussion highlighted the merits of Bitcoin, gold, and stocks, offering valuable insights into potential investment strategies for 2024. The panelists included NISHI, an analyst from SBI VC Trade; Hiroshi Yamaguchi, chief trader at Mitsui & Co.; and Harumi Yuki, founder of BBP.Pte.Ltd. Each expert represented a distinct asset class: cryptocurrency, precious metals, and equities.
The Appeal of Each Asset Class
Stock Market: A Must for Every Portfolio
Harumi Yuki emphasized that stock investment remains crucial in a capitalist economy, especially with Japanese equities reaching their highest levels in 47 years. She pointed out that the tax advantages of stock investments make them a solid base for any portfolio. Yuki also recommended starting with stocks and then considering other assets, particularly in light of the new NISA system.
Gold: The Stable Safe Haven
Hiroshi Yamaguchi listed three primary reasons for investing in gold. First, gold functions as a universal currency, particularly in times of geopolitical uncertainty, such as the ongoing tensions between the U.S. and China, and Russia’s invasion of Ukraine. Second, gold serves as a hedge against inflation, maintaining its value as a physical asset when money supply increases. Third, gold’s allure extends beyond economics, with its intrinsic beauty captivating humanity for thousands of years.
Bitcoin: The Digital Revolution
NISHI countered these perspectives by passionately defending Bitcoin as a more flexible and innovative form of investment. Unlike gold, Bitcoin can be transferred over the internet, making it accessible even in conflict zones. NISHI criticized the stock market for its opacity, with indices often subject to the whims of policymakers behind closed doors. In contrast, Bitcoin’s data is fully transparent and available on the blockchain, making it a fundamentally different financial product.
Ideal Portfolio Allocation
Balancing Stocks, Gold, and Bitcoin
Moderator Takayama led the discussion towards portfolio allocation, asking the panelists for their ideal asset mix. A 50% allocation to stocks, 25% to gold, and 25% to Bitcoin emerged as a baseline. The conversation then turned to how this allocation should shift during economic cycles of monetary easing or tightening.
Monetary Easing: Stocks and Bitcoin Become Attractive
Yuki suggested that during monetary easing, both stocks and cryptocurrencies tend to perform well. Yamaguchi added that in such times, gold typically gains appeal as interest rates fall, making it a valuable hedge. NISHI agreed that Bitcoin historically surges during periods of monetary expansion, suggesting that investors reduce their Bitcoin allocation to around 15-20% once a rally begins.
Monetary Tightening: Caution with Bitcoin, Gold Remains Steady
When discussing the impact of monetary tightening, Yuki advised rotating within the stock market but emphasized the importance of selling before a downturn. Yamaguchi predicted that gold would lose some appeal as interest rates rise but noted that it could still serve as a hedge against inflation. NISHI argued that Bitcoin tends to crash when interest rates rise, making it a prime opportunity for long-term investors to buy during significant downturns.
The Impact of the U.S. Presidential Election
Trump vs. Harris: What It Means for Investors
Yuki pointed out that the upcoming U.S. presidential election in November could significantly impact market dynamics. A Trump re-election would likely be bullish for stocks, while uncertainty surrounding Kamala Harris’ candidacy could make equities more volatile. NISHI suggested that the outcome would also affect the cryptocurrency market, particularly if Gary Gensler, the SEC chair known for his critical stance on cryptocurrencies, retains his position. Yamaguchi added that gold prices are heavily influenced by U.S. monetary policy, with the market already pricing in a 1% rate cut between September and December 2024.
The panel concluded by agreeing that a well-diversified portfolio combining stocks, gold, and Bitcoin offers the best protection against various economic scenarios. As Yuki pointed out, stocks provide long-term growth, gold offers stability, and Bitcoin represents a new frontier of technological innovation. Together, these assets can help investors navigate the uncertainties of 2024 and beyond.
