Panel at Quinnipiac University’s Virtual GAME X Forum Sees Evolving Roles for Commodities and Cryptocurrencies
The “Outlook for Commodities, Cryptocurrencies and FX” panel on day two of Quinnipiac University’s 10th Global Asset Management Education (GAME) Forum focused on gold as a traditional investment safe haven, and the potential of cryptocurrencies—particularly Bitcoin—to usurp its role.
Juan Carlos Artigas, executive director and head of research at the World Gold Council, argued that the precious metal—with dual value as luxury good and investment—will continue as a significant asset, even in diversified portfolios that also include cryptocurrencies.
“With cryptocurrencies, the allure is what they may become,” he said. “If investors take on risk by putting assets in Bitcoin, they may need something like gold to hedge some of that risk.”
Mike McGlone, senior commodity strategist at Bloomberg Intelligence, was positive on the value of holding a basket of precious metals, but he said that cryptocurrencies are here to stay—and are already replacing gold in some portfolios. “Cryptocurrencies are becoming a digital reserve asset,” he said. “They can potentially change the value of gold and make it redundant for that purpose.”
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For Fiona Boal, global head of commodities and real assets at S&P Dow Jones Indices, it’s too early for investors to make a major bet on cryptocurrencies. “Bitcoin has a long way to go to be considered a store of value,” she said. “There’s also a problem with extreme volatility.”
Several panelists mentioned that cryptocurrencies have seen very little government regulation, but that could change relatively soon. They also discussed how they might be measured by investors who use environmental, social and governance (ESG) criteria. Cryptocurrency mining, Boal explained, is an energy-intensive process.
Another commodity, oil, was seen by some panelists as a non-appreciating asset as the world pivots to renewable energy. Elon Musk’s Tesla Motors is part of that pivot, and he said earlier this month he would accept U.S. Bitcoin car payments. “He’s doing the prudent thing,” McGlone said. Boal said it’s probably smart for Tesla to accept Bitcoins, but it may not yet be a good means of payment for consumers. “Does he expect a lot of people to buy his cars with Bitcoins?” she asked. “I don’t think so.”
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