By David Lin
As the second wave of the coronavirus sweeps through the world, investors have looked for assets to diversify away from equities, and this behavior has pushed both gold and bitcoin up together over the last four weeks, said Alex Mashinsky, founder and CEO of Celsius Network.
Mashinsy remains bullish on both gold and bitcoin in this environment, but despite stronger economic data released recently, he warns that the economy will continue to suffer except for one sector: technology.
“I am much more pessimistic on the economy or the GDP of the U.S. economy long-term. There are going to be huge winners: anyone who’s moving electrons, so if you’re Microsoft, or Zoom, or Amazon, and you’re mostly moving electrons through AWS and services like that, you’re a huge winner,” he said.
As the U.S. dollar has depreciated along with inflationary pressures creeping into the economy, real returns on assets like gold have depreciated in dollar terms, Mashinsky noted.
“The dollar lost 20%, 30% of its value over the last six months, so the appreciation of the price of gold is against all these other risk assets in dollar terms, losing value,” he said.
Mashinsky added that we already have seen deflation and now, inflation of money will happen, followed by an inflation of prices.
On geopolitical tensions, President Donald Trump’s ordering of Tik Tok, a Chinese social media platform, to sell off its U.S. operations to an American company is congruent with what China has already done to many U.S. tech companies, Mashinsky said.
This is a company-specific issue, and is not indicative of a risk of other foreign tech companies being banned in the U.S., he said.
Via Kitco Newsby