Bitcoin has become digital gold for the Millennial generation. That is the belief of Jeremy Siegel, a professor at Wharton Finance, University of Pennsylvania.
Bitcoin is the gold of millennials
The professor spoke about this during an interview on CNBC’s Squawk Box programme. Asked about the disappointing performance of gold, he commented:
“Let’s face the fact, I think Bitcoin as an inflation hedge in the minds of many of the younger investors has replaced gold”.
Also affected by the cryptocurrency market, according to Professor Jeremy Siegel, are commodities. That’s why he adds:
“Digital coins are the new gold for the millennials”.
Bitcoin and gold compared
Professor Jeremy Siegel’s opinion certainly takes into account what gold and Bitcoin experienced in 2021. It was the year in which the world economy had to learn to live with the Covid pandemic, rising inflation and economic difficulties caused by the pandemic.
In a situation of uncertainty, investors have been choosing safe-haven assets. Gold is considered the ultimate safe-haven asset, but it does not seem to have benefited from this particular scenario. In January 2021, gold was worth around $1,950, while 12 months later an ounce of gold is now valued at $1,803, a loss of around 7%. Gold has also experienced a very volatile year, with a low peak in April of around $1,680.
In contrast, Bitcoin started the year 2021 at a price of around $34,000 before peaking at $69,000 in November. It is currently worth $46,000, an increase of around 60%.
But there are other cryptocurrencies that have performed far better than Bitcoin, such as Ethereum (ETH), which gained 241% in one year, or Cardano (ADA), which instead increased its value by over 400%. With these numbers, it is not difficult to understand why young people prefer an innovative product like cryptocurrencies rather than gold.
Trading for everyone
In addition to this, cryptocurrency trading has become an extremely easy activity for younger people compared to gold investments. Apps like Robinhood have introduced millennials to the financial market and crypto. Other platforms such as Coinbase also have fairly simple interfaces that allow trading in just a few clicks.
It is worth noting the role played by PayPal. It is not a coincidence that since October 2020, when the online payment giant introduced the buying and selling of Bitcoin on its platform, the crypto market has started an upward race that may not be over yet.
Ultimately, between gold and Bitcoin, the latter seems to be more affordable for everyone, including Millennials.