update 18 August 2021

Newcrest Mining CEO: Crypto Investors Need Gold to Hedge Against Price Volatility

Sandeep Biswas, CEO of Newcrest Mining, one of the world’s largest gold mining companies,  suggested that crypto investors should consider buying gold to hedge against the crypto market’s high price volatility.

In an interview today, Biswas told Bloomberg that part of the reason crypto investors should acquire the popular bullion is that its value is more stable. According to the CEO, owning gold will be in the best interest of cryptocurrency investors.

Hedging Against Price Volatility

Biswas’ comment comes on the heel of Bitcoin setting a new all-time high (ATH) of over $48,000 following the recent bullish news of Tesla investing $1.5 billion in the asset. 

Few hours after Bitcoin set a new ATH, the asset plummeted below $45,000, fueling questions about its high volatility nature.

Despite bitcoin’s increased volatility, the leading cryptocurrency was once again compared to gold, with many financial experts trying to analyze which asset will outperform the other in the long run. 

Joining the debate, Sandeep Biswas said gold is a different class of investment that has better properties than Bitcoin. 

“If you’re into cryptos, you want to consider having some gold. It may act as a bit of a hedge against the volatility of cryptos,” he said, adding that gold is “a tangible asset: you can see it, you can touch it, you can feel it, you can mold it, you can make it into jewelry, whatever you want.”

While Biswas is concerned about hedging bitcoin’s volatility, some analysts believe there is no need to choose one asset over another, as both assets can co-exists side-by-side.

Earlier today, Arnab Das, Head of EM Macro Invesco, stated in an interview with Indian Economic Times that cryptocurrencies could also be used as a hedge against inflation just like gold. 

For Das, using these assets as a hedge against inflation would help them behave like proper financial instruments.

Bitcoin Eyes $50k 

The high volatility associated with crypto assets has been an important topic of discussion for many. However, it has not deterred major investors from adopting the support, especially now that the world is trying to recover from the ruins caused by the deadly coronavirus (COVID-19) pandemic.   

A few days ago, Miami’s Mayor disclosed that the city is considering investing part of its balance sheet in Bitcoin. Earlier today, Mastercard announced its plans to integrate crypto as a payment option for its merchants later this year. 

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These bullish developments are why analysts believe that bitcoin is well-positioned to hit the $50,000 price target anytime soon.