Charlie Morris, who is the Founder and CIO of ByteTree Asset Management, believes that gold and Bitcoin are set to experience significant and lasting gains due to a weakening dollar and increasing sovereign risk.
Per a report by Kitco News published on April 17, Morris believes the econometrics are clear-cut, suggesting that investors in gold and Bitcoin are unlikely to face bad days. In an interview with Kitco News reporter Ernest Hoffman on April 12, Morris expressed his conviction that the market is witnessing the beginning of a strong bull market for precious metals, primarily due to the dollar losing strength.
Morris highlighted the unprecedented rise in gold prices without Wall Street’s backing, which has not been seen in the past 25 years. He urged investors to be cautious of escalating sovereign risk, particularly when the U.S. 10-year bond yield exceeds four percent.
Morris recounted events from last October, when the U.S. 10-year bond yield rose above four percent, leading to the resignation of the UK Prime Minister and the Chancellor of the Exchequer. The attempt to implement pro-growth economic policies did not prove fruitful. More recently, five banks failed, and Credit Suisse, a leading global bank, collapsed. He noted that the U.S. government’s response to the Signature Bank and Silicon Valley Bank implosion only increased risk.
With the growing sovereign risk worldwide, Morris expects gold prices to surge. He considers the recent inflows of Wall Street investment into gold to be significant, as central banks and Wall Street investors are now buying gold simultaneously, creating the ideal conditions for a bull market.
In addition to gold, Morris is optimistic about Bitcoin, attributing sustained inflation and poor returns on other assets as key drivers. He is nearly certain that Bitcoin has reached its low point for this cycle, estimating a price of around $40,000 over the next year. However, he believes that the six-digit, hundred-thousand-plus figures will only be attainable in the next cycle after the halving event.
Morris asserts that much of the negativity surrounding Bitcoin in the past 18 months was unfounded, as it was being blamed for failures in other areas of the crypto sphere. He emphasized the resilience and robustness of the asset.
In conclusion, Morris envisions gold and Bitcoin outperforming in the medium term and complementing each other as investments. He believes that now is an excellent time to own inflation-protection assets while they remain underpriced.