Hugh Hendry believes: bitcoin will be one of the best assets to invest in when the economy is in trouble. Now the capitalization of the first cryptocurrency is $595 billion and, according to the blogger, the figure can triple.
“When you increase the prime rate to 5% in the UK, the effective rate is about 20%. And that breaks down a lot of processes in the economy,” Hendry said with confidence.
The former hedge fund manager stressed that gold remains an excellent defensive asset, but its upside potential is limited. Bitcoin, in turn, has extremely high growth potential.
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“Growth for gold is too difficult, because the capitalization is $13 trillion. If gold tripled in value, its capitalization would compare to the entire U.S. stock market. I’ve lived a long time and seen all kinds of crazy things, but I can’t imagine that.. Therefore, gold is likely to maintain its price. Bitcoin’s capitalization is half a trillion. And bitcoin has already entered the world of capital as an alternative asset. That is, as an alternative to commercial real estate, private companies, gold, and so on. And that market is $100 trillion, so bitcoin could easily triple its capitalization and reach $1.5 trillion. And that would only be half the capitalization of Apple,” says Hugh Hendry.
The investor believes that the first cryptocurrency is likely to benefit from pressure from U.S. regulators on other crypto-assets, as only bitcoin has so far been officially recognized as a commodity, not a security.
The U.S. Securities and Exchange Commission is now considering five applications for spot ETFs on bitcoin.