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Bitcoin, Gold, Silver, and Ethereum Can All Serve as Inflation Hedges

Real Money's Stephen 'Sarge' Guilfoyle looks at modern day ways to protect against price surges.
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Precious metal investors have faced a grueling year as gold prices contracted after two years of gains.

In recent days, however, gold and silver prices reached their highest levels since the sharp selloff in November. They remain a good alternative asset to invest in, Stephen “Sarge” Guilfoyle wrote in a recent Real Money Pro column.

“Now with consumer inflation spiking to a 7% annual rate, and wages rising just 4.7% annually, investors are waking up to one of the yellow metal's perceived functions, that of being an inflation hedge...,” Guilfoyle  wrote recently on Real Money.

These days, though, cryptocurrencies have received some of the capital that investors would have sunk into gold or silver previously.

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“There is no doubt in my mind that Bitcoin or Ethereum have taken share away from Gold or Silver where alternative (ex-fiat money supply) investment is concerned,” he wrote. “While folks of a certain age (mine) rely on precious metals as a way to circumvent the system, that is precisely how those younger than I look at cryptos.”

While Guilfoyle does not own any cryptocurrencies, he believes that ethereum is a better bet than bitcoin.

“I am not a naysayer, though I do know where my physical gold and silver are when the lights go out,” Guilfoyle wrote. “I cannot tell you what to do. I can tell you what I do. I have long held that anywhere from 5% to 10% of my investible funds should be held in alternative, non real estate based assets.”

Investors who prefer allocating their money into crypto could invest a portion into the 5% to 10% portion of alternative assets that he recommends.

“What I am in the process of doing is shifting my bias from gold dominant to still majority gold, but a significantly more elevated exposure to silver,” he wrote.

Get more trading strategies and investing insights from the contributors on Real Money.