Bitcoin Is Surging, Gold Will Also Surge

As I write, Bitcoin is trading higher by 15% and currently trades at $12,785.

While it’s difficult to predict any time-line, I would not be surprised if Bitcoin touches previous highs in the coming quarters.

Factors such as wider adoption of the cryptocurrency coupled with inflation fears is likely to trigger sustained rally.

However, as I talk about Bitcoin and benefit from the gains, I also want to mention that a big rally is impending for gold.

I am bullish on the precious metal and I believe that the hard currency will appreciate as fiat money depreciates.

One factor worth noting is that the Federal Reserve has committed to keep interest rates near-zero levels through 2023.

The implication is easy money and this will translate into higher inflation.

Billionaire hedge fund manager Stanley Druckenmiller has already warned that inflation could hit 10% in the coming years. If that holds true, gold can easily trade at $2,500 to $3,000 an ounce.

I also want to show readers the following chart that gives the assets of the Federal Reserve.

The total assets of the Fed have increased from $4.1 trillion on February 2020 to $7.2 trillion in October 2020. This is a clear indication of ultra-expansionary monetary policies.

In addition, the chart below gives the government debt in the United States.

Its clear that total government borrowing has been surging and has reached $26 trillion.

Be it increase in Federal Reserve assets or an increase in government debt, the future is likely to see high to very high inflation.

Therefore, investors need to be exposed to physical gold. In addition to silver.