A new article by Jeb Handwerger of Investing.com discusses a few problems with cryptocurrencies that leads Handwerger to believe that the future for investors is no longer in cryptocurrencies and that real returns and potential now lie within silver and gold.
The article, titled: ‘Get Out of Crypto and Move Into Gold and Silver’ can be found here- https://www.investing.com/analysis/get-out-of-cannabis-and-crypto-and-move-into-gold-and-silver-200323223
Yes, this does sound like something out of a 2005 financial drama movie but no, it’s not, it’s real and its on the internet. Regardless of this, we are going to take a look at Handwerger’s points. Handwerger states:
“We have so many warning signs of another crash. The biggest one is the major increase in bond yields in 2018. Not only have rates moved higher but it jumped quickly the most in many years.”
“Conditions point to a bear market and possible flash crash this summer. Please prepare for real estate and stock market valuation to come back to earth as rates move higher.”
“You might want to look at hedging against the financials, real estate and bonds (TBT). Stick to small cap stories with no debt over large caps with debt and look to see if they have real assets preferably in the form of some sort of commodity in the ground. The mining sector (GDX (NYSE:GDX)) which has been under attack by the activists and unloved for years may actually be one of the best places especially gold (GDX), silver (SIL) and copper miners (COPX). The energy (XLE) and agriculture (DBA) sector may also be safe areas which over time could outperform during a potential bear market panic.”
Okay, so Handwerger essentially worries that the crypto markets will crash and that as a result of this, mining based industries (silver and gold) are going to be far more hard wearing and will offer returns on investments. Unfortunately, Handweger fails to touch upon and discuss any of the technologies behind cryptocurrencies that mean, even within a crash, they will still work and run as viable financial assets, and creep back up in value. Moreover, as the technologies develop, values will shoot back up again. Within this argument and by disregarding the inherent technological advances of cryptocurrencies, Handweger is struggling to put up a viable argument, the chances are actually, that we are just seeing somebody here who wants to plough more investment into traditional mining industries to ramp up his own shares, who knows.
Our advice? Invest in silver and gold if you want too, it’s an exciting industry and can offer some viable returns. Overall though, this doesn’t mean you should turn your back in cryptocurrencies, they are built upon a technology that is here to stay. One day, the world could run out of silver and gold, on the flip side, crypto is here to stay.
Whatever your choice, make sure you invest safely, do your research and be sure you can afford to invest. If you know what you are doing, no matter which path you choose, you will prosper, that’s the main thing.