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Last month, Bitcoin broke the $29,000 mark for the first time in almost a year. Ethereum, on the other hand, blew past its year-to-date highs as it moved over the $1,810 level.
Is a $30,000 Bitcoin and a $2,000 Ether next?
If this really is the end of the crypto winter, as some analysts predict, then we could see a sustained rally to pre-2022 price levels. With the banking sector in crisis and the Fed softening its hawkish rate hike policy, we could see broader market conditions that shuttle capital into the digital asset class.
As for precious metals, March was one of the strongest months in years for the asset class.
Gold is up nearly 7%.
Silver is up nearly 13%.
Platinum is up 1.7%.
Meanwhile, the S&P 500, the U.S. equities benchmark, saw 1.1% gains over the same period of time. Clearly, it’s not easy money nor a ballooning stock market that’s driving the crypto or precious metals markets.
Rather, precious metals and cryptocurrencies are rallying due to their hedging properties. Since they’re uncorrelated to the stock market, precious metals can provide a hedge against market risks and boom and bust cycles.
Plus, the BRICS alliance of countries—headed by China and Russia—are in talks to replace the U.S. dollar with their own reserve currency for trading. In the years ahead, we could see deep economy-wide de-dollarization as more countries switch off the U.S. dollar in favor of new, gold-backed reserve currencies. If widely adopted, it could send the price of gold surging past the all-time high territory of $2,069.
Crypto Winter About to Thaw?
We’re now two years deep into the Crypto Winter, but it finally looks as though the clouds are parting and the market is warming back up. Due to system-level concerns in the monetary system, banking system, and interest rate environment, cryptocurrencies and other portfolio diversifiers are likely to continue accruing value in the months ahead.
Given that many Americans are worried about systemic risks associated with the banking sector and a potential upcoming recession, institutional capital is now funneling into gold, silver, Bitcoin, and other diversification assets.
Will you count yourself among them? If you want to take steps to manage risk in your investment portfolio, now might be a good time. While the market is heating up, consider investing in a variety of alternative assets through a self-directed IRA. Our vetted and top-ranked IRA providers allow you to invest in precious metals and cryptocurrencies within fully-insured, tax-advantaged retirement accounts. Open an account today to get started managing risk on your own terms.
Mark Turner is an author and editor at Sophisticated Investor. He has over two decades of experience in the financial industry as a broker in both Chicago and New York and has written for several top tier publications. He currently covers the topics of alternative investments, geopolitical events, US economy, portfolio diversification and others.
