Cryptocurrencies are not a safe asset, experts say and recommend investing in stocks. The March crash of the cryptocurrency market once again proved that the price of the main cryptocurrency, Bitcoin, could collapse immediately by 50 percent or more.
FTSE 100 Index Shares A Reliable Investment Asset
Despite the fact that cryptocurrencies quickly recovered after the March crash, which went down in history as Bloody Thursday, investors still do not fully trust this asset. FTSE100 index shares, which include shares of 100 leading companies of the world, including such companies as HSDS Holding, British American Tobacco, Vodafon Group, Coca Cola, ROLLS-ROYCE HOLDINGS and others, look much more attractive and reliable.
The value of shares directly depends on the cash flows and profits of these companies, which guarantees investors the value of the asset. For example, today one FTSE 100 share is trading at $ 6,292, and over the past 24 hours the price of shares has risen by 1.10%, while the price of bitcoin continues to fall. Thus, FTSE 100 stocks are likely to be far more profitable than bitcoin and gold in the long run.
“That's why I think FTSE 100 shares could be the best investment for investors who want to get rich,” said Rupert Hargreaves, a journalist and investor.
As Hargreaves himself explains, the second wave of the coronavirus crisis could destabilize the global economic recovery. And consumers will not rush to spend their savings, as many economists predict.
Given these circumstances, investors should be careful when choosing assets to invest. The best investment may be high-quality FTSE 100 stocks with large returns and strong balances.
In addition, companies that also have a certain competitive advantage can weather the storm better than others. Competitive advantages should be understood as the low costs of the company, and a strong brand that customers trust.
As for bitcoin and gold, these are not the best assets for investing, says Hargreaves.
Gold does not go up, but bitcoin is volatile
According to Hargreaves, bitcoin, as an investment asset, only looks attractive. However, cryptocurrencies do not have proven value, and their value largely depends on the interest of the community. According to Peter Malluk, president and director of investment at Creative Planning's asset management company, Bitcoin cannot be considered a defensive asset, as it is subject to speculation and remains highly volatile. In addition, people who have a large number of bitcoins in their arsenal can affect its value. As Mulluk himself predicts, Bitcoin will drop to $ 3,100 before the end of the year.
Gold could receive the status of the main investment asset, and there are reasons for this. Amid falling stock, commodity and foreign exchange markets, the precious metal rose in price and for the first time crossed the mark of $ 1,700 per ounce. However, success was short-lived, and gold began to roll back. An ardent supporter of investment in gold, Peter Schiff called Bitcoin a speculative asset and recommended investing in precious metals. Nevertheless, the community did not agree with this position, because over the past few years, the price of gold has remained almost unchanged.
Bloomberg analysts have a completely different opinion
In the new economic realities, bitcoin and gold may become the most profitable assets in 2020.
Bitcoin and gold will outstrip all other commodity assets in 2020. This is the conclusion reached by Bloomberg analysts in the June forecast for the commodity sector.
Bitcoin and gold are now laying the foundations for a large-scale rally throughout the year. Moreover, these two assets have already been leaders in growth since the beginning of the year and in the future they will only strengthen their positions. According to experts, the economic crisis and other consequences of the COVID-19 pandemic, including the threat of inflation, will push investors into safe assets.
Do you think it is true that stocks are more reliable than bitcoin and gold and why? Share your thoughts in the comments!