Specialising in Bitcoin, Gold and Digital Assets

ByteTree Asset Management

Investment Manager specialising in bitcoin, gold and digital assets

CEO, ByteTree Asset Management

Commodities

<p>I keep hearing the same old arguments. Gold is unproductive and can’t be valued as it has no yield. Yet the smart money turns to it when things go wrong. In recent years, financial markets have been squeezed so hard that they have nothing more to give.</p>
<figure class="editor-figure mceNonEditable"><img src="https://bytetree.com/assets/uploads/2021-11-atlaspulse-gold-record.png" class="editor-image img-responsive"></figure>
<h2>HIGHLIGHTS</h2>
<table class="table table-striped">
<tbody>
<tr>
<td>Regime</td>
<td>The equity bubble has popped</td>
</tr>
<tr>
<td>Macro</td>
<td>Real rates rise yet price holds</td>
</tr>
<tr>
<td>Valuation</td>
<td>Fair value</td>
</tr>
<tr>
<td>Flows and Sentiment</td>
<td>Bullish</td>
</tr>
<tr>
<td>Technical</td>
<td>Base building</td>
</tr>
</tbody>
</table>
<p>In our monthly gold and bitcoin webinar series, we were delighted to welcome Duncan MacInnes. Duncan is Ruffer’s bitcoin man, and you may recall they had a highly successful trade in late 2020, funded from their gold position. They believe bitcoin will not necessarily replace gold but has its place and will forever be part of the macro landscape. At ByteTree, we concur.</p>
<p>Ruffer sold their bitcoin a few months later as their multi-year forecast for institutional adoption came about much more quickly than they ever thought. They saw a high price and a hype cycle and took several billion dollars of profit. The latest factsheet states that Ruffer’s gold and gold equity exposure is back to 7.7%, which is roughly where it has remained over the years. The inference is the proceeds returned to gold.</p>
<p>We discussed the comparison between these two assets and how the macro-economic environment is likely to see lower returns for bonds and equities, greater volatility and a better environment for inflation-sensitive assets. Bitcoin and gold are both suitable candidates, but gold prefers risk-off conditions, which is where we are now.</p>
<p>With so much uncertainty, the case for gold is a strong one and you can <a href="https://youtu.be/AQ4VhBs0ErQ" target="_blank" rel="noopener">watch the interview here</a>. We thank Duncan for a thoughtful discussion and look forward to speaking to John Reade, Head of the World Gold Council, at the end of February. What he doesn’t know about the gold market isn’t worth knowing.</p>

I keep hearing the same old arguments. Gold is unproductive and can’t be valued as it has no yield. Yet the smart money turns to it when things go wrong. In recent years, financial markets have been squeezed so hard that they have nothing more to give.

HIGHLIGHTS



Regime
The equity bubble has popped


Macro
Real rates rise yet price holds


Valuation
Fair value


Flows and Sentiment
Bullish


Technical
Base building



In our monthly gold and bitcoin webinar series, we were delighted to welcome Duncan MacInnes. Duncan is Ruffer’s bitcoin man, and you may recall they had a highly successful trade in late 2020, funded from their gold position. They believe bitcoin will not necessarily replace gold but has its place and will forever be part of the macro landscape. At ByteTree, we concur.
Ruffer sold their bitcoin a few months later as their multi-year forecast for institutional adoption came about much more quickly than they ever thought. They saw a high price and a hype cycle and took several billion dollars of profit. The latest factsheet states that Ruffer’s gold and gold equity exposure is back to 7.7%, which is roughly where it has remained over the years. The inference is the proceeds returned to gold.
We discussed the comparison between these two assets and how the macro-economic environment is likely to see lower returns for bonds and equities, greater volatility and a better environment for inflation-sensitive assets. Bitcoin and gold are both suitable candidates, but gold prefers risk-off conditions, which is where we are now.
With so much uncertainty, the case for gold is a strong one and you can watch the interview here. We thank Duncan for a thoughtful discussion and look forward to speaking to John Reade, Head of the World Gold Council, at the end of February. What he doesn’t know about the gold market isn’t worth knowing.

Gold

The Equity Bubble Bursts