The growing prominence of Bitcoin is helping to secure the cryptocurrency’s place as a genuine alternative asset. In fact, some have gone so far as to call Bitcoin the “new gold,” despite the fact that Bitcoin is far more volatile and speculative.
In the upcoming webcast, Can Bitcoin Join Gold at the Alternative Asset Table?, Michael Saylor, CEO, MicroStrategy, will share his thoughts on cryptocurrencies and why he believes this is the decade of Bitcoin. Frank Holmes, CEO of U.S. Global Investors and Executive Chairman of HIVE Blockchain Technologies, will discuss why there may be a place for both digital currencies and gold in everyday investment strategies and how to explore incorporating both into a portfolio strategy.
There “are six reasons why both Bitcoin and gold can be considered money,” Holmes said in a recent note, pointing to durability, portability, divisibility, uniformity, limited supply, and acceptability. Yet “whereas gold is the fear trade, Bitcoin is the greed trade.”
As a way to gain exposure to the rise of gold, investors may focus on a fund strategy that incorporates royalty and streaming companies, which many consider being the “smart money” of the space One such fund is the U.S. Global GO GOLD and Precious Metal Miners ETF (NYSEArca: GOAU). The U.S. Global GO GOLD and Precious Metal Miners ETF is a smart beta offering that tracks a specialized or rules-based index to help home in on quality players in the gold mining space. The underlying U.S. Global GO GOLD and Precious Metal Miners Index uses quantitative analysis designed to capture the performance of companies engaged in the production of precious metals either through active (mining or manufacturing) or passive (owning royalties or production streams) means.
The ETF also includes a 30% tilt to royalty and streaming companies, which can help investors better-manage common risks associated with traditional producers, such as building and maintaining mines. The lower risk may also diminish risk since royalty companies have historically rewarded investors by increasing dividends at a faster pace than the broader equity market.
According to U.S. Global, royalty companies are a superior way to target the gold mining segment. Royalty companies are not responsible for costly infrastructure, so huge operating expenses can be avoided. These companies hold highly diversified portfolios of mines and other assets to mitigate concentration. Additionally, they generate some of the highest revenue per employee of all public companies, while simultaneously growing cash flows and dividends.
Financial advisors who are interested in learning more about gold and crypto can register for the Wednesday, August 18 webcast here.