For years, the financial community has debated the best and safest investments in times of uncertainty. For most conservative traders and investors, bonds are the right choice. But for the younger generation and tech-savvy individuals, Bitcoin is a better choice. Despite current fiscal challenges and 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 rising interest rates. Interestingly, the bank is silent regarding Bitcoin’s role in financial markets. However, many of America’s leading 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 US debt.
They recommend central banks & traders increase exposure 🍿#Gold #Silver #SilverSqueeze pic.twitter.com/XIp7aAYYrx— Make Gold Great Again (@MakeGoldGreat) October 17, 2024
Bank Of America: Gold As A Better Hedge Against Inflation
Bank of America analysts say gold remains the main choice in current economic conditions. While banks are including Bitcoin and blockchain in the conversation, they remain cautious. The bank added that gold is a logical choice for investors and central banks, while gold is a better hedge against inflation and highly volatile currencies.
Additionally, gold is seen as a better investment than Bitcoin as many expect the cryptocurrency to potentially fall, especially as US PPI inflation reports at 1.8%, up from an estimate of 1.6%. An increase in PPI means inflation will put pressure on the economy, which in turn could motivate the Federal Reserve to raise interest rates. Because there is still economic uncertainty, gold is a reliable investment.
Gold Seen Reaching $3,000 Level
Bank of America estimates that gold prices could reach the $3,000 level. This prediction is supported by the policy plans of two US presidential candidates, Donald Trump and Kamala Harris. Both candidates support fiscal expansion, thereby increasing spending.
The bank estimates that spending could grow 7 to 8% annually by 2030 due to candidates’ pledges to support defense, climate and demographic policies. And if the market continues to take on more debt, increased market volatility could encourage more investors to invest in gold.
Image: Deutsche Digital Assets
Many central banks are also diversifying and increasing their reserves. Foreign exchange reserves have increased from 3% to 10% over the decade, and demand from Western investors has increased recently. In short, Bank of America views gold as a better long-term safe investment.
BoFA Remains Cautious Over Blockchain & Bitcoin
Like many other financial institutions, Bank of America is slowly tapping into blockchain’s potential. Bitcoin is recognized as an alternative to gold as a hedge against inflation. Blockchain’s decentralization and limited supply also make it an ideal investment vehicle.
Now that Bitcoin and altcoins are becoming increasingly popular, it is only a matter of time before leading banks like Bank of America include them in their investment strategies.
Featured image from CryptoTab Browser, chart from TradingView
