By CCN: Wells Fargo’s name is synonymous with gold. Henry Wells and William Fargo launched the bank in the Wild West during the California Gold Rush, supporting both the investment in and delivery of the precious metal via its famous stagecoach. The U.S. has come a long way since the stagecoach, and bitcoin is now encroaching on gold’s store-of-value territory. Shockingly, Wells Fargo Head of Real Asset Strategy John LaForge no longer believes the precious metal is the one to own, telling Kitco:
“Stocks, in the last few weeks have hit, and you see the days when stocks really get hit, and what does gold do? Gold is up $3, it’s up $5, it’s up $7. I think where we are in this gold super cycle, this long cycle with commodity prices, is we’re kind of in the dull period.”
LaForge didn’t jump on the cryptocurrency high-speed bullet train. In fact, he suggested if anything, the bitcoin is too nascent of an asset class to cause any disruption to gold’s multi-trillion dollar market. But he didn’t have to validate crypto; the returns speak for themselves. While gold is struggling to deliver paltry single-digit returns, bitcoin investors are having the time of their lives as the biggest cryptocurrency reaches for the moon.
The bitcoin price reached a new 2019 high on May 27. | Source: CoinMarketCap
What Safe Haven?
Gold is designed to be a safe haven from the volatile stock market, especially during times of heightened uncertainty in the economy. The precious metal’s uncorrelated nature to other asset classes is what makes it so special. Now that it has essentially lost its shine during a time when investors need a flight to quality more than ever, bitcoin is increasingly looking like the only asset class that’s packing a punch in 2019.
LaForge points investors to currencies instead of gold except he chooses the wrong one, suggesting the U.S. dollar instead of a cryptocurrency such as bitcoin and saying: