Bitcoin is beta version gold; revolting against precious metals a bad idea, claims Crescat Capital’s Otavio Costa

  • 18 July 2019, Thursday, 08:10

With cryptocurrency’s entry into mainstream finance, discussions surrounding Bitcoin have taken a hold of the economy as a whole. Towards this effort, Morgan Creek Capital’s Anthony Pompliano interviewed Crescat Capital’s Otavio Costa. Pomp tweeted,

“We discuss Bitcoin, the current U.S. economic markets, China, precious metals, how central bankers handle recessions, and what Tavi thinks is most likely to occur in the macro world in the short term. Highly recommend!”

Among the broad range of topics mentioned in the tweet, Costa highlighted the uncertain future of gold and its relationship with cryptocurrencies. While he supported the need for instituting a replacement for fiat, Costa said,

“Gold being the father of this idea, I just don’t believe in this theory of “drop gold” and revolting against precious metals in general. I don’t think it’s a smart idea.”

Comparing Bitcoin to a “beta version of gold,” the Global Macro Analyst suggested crypto-ecosystems also follow the successful old method of longing metals and shorting stocks. He put forth this idea by explaining the implication of an inverted yield curve, stating how investors are only concerned about the long term conditions of the economy. He added,

“As a result, either long-term rates start dropping and the front-end of the curve starts rising a little bit and that causes the inversion. Every time that happens, we’ve seen a recession follow.”

While the controversial topic of gold vs. cryptocurrency continues to engage many in the financial space, Costa revealed that while he supports the notion of replacing fiat currencies, he has not made any investments in Bitcoin or any other altcoin. He attributed this reluctance to his low level of understanding of the underlying technology, hinting at the common saying – “Don’t invest in something you don’t understand.”