Wharton Professor: Bitcoin is the brand new gold for millennials

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  • Bitcoin offers better inflation protection than gold, said a Wharton finance professor.
  • Jeremy Siegel added that Bitcoin has replaced gold in the minds of younger investors.
  • Peer-to-peer money far outperformed gold over the past year, rising nearly 60%, while the metal lost 5% of its value.

Bitcoin acts as better inflation protection than gold and has replaced the metal in the minds of younger investors, a senior Wharton professor said in an interview with CNBC on Friday.

“Let’s face it, I think Bitcoin as an inflation hedge has replaced gold in the minds of many younger investors,” said Jeremy Siegel. “I think the story of gold is a fact that the younger generation see bitcoin as a replacement.”

The professor added that gold was “disappointing” in 2021, in fact the metal’s worst year since 2015. Gold lost 5.81% of its value in 2021 while Bitcoin rose nearly 60%. The S&P 500, on the other hand, gained around 30%.

The performance of Bitcoin, Gold and the S&P 500 in 2021. Source: TradingView.

Investors were open about gold and bitcoin in 2021, with many pointing out that the digital currency system is superior to the old metal. Billionaire Howard Marks, chairman of Oaktree Capital, said in September that Bitcoin has advantages over gold, adding that its supply limit of 21 million allows peer-to-peer currency to continue to appreciate as demand increases. In October, JP Morgan analysts said in a press release that “institutional investors appear to be returning to Bitcoin because they may see it as better inflation protection than gold”. According to the bank, money flowed out of gold and into bitcoin, fueling inflation hedging and the substitution of gold as the basis for such a purpose.

US consumer prices rose to levels not seen in decades in 2021, as the CPI, the main index for measuring inflation in the country, hit 6.8% in November, its highest level since 1982, the ninth month in a row The Fed’s target of 2% was inflation rate. In response, the central bank announced a further tightening of its monetary policy in 2022 and aimed to end its asset-buying programs before the summer.


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