U.S. Federal Reserve strategist: Bitcoin can become a competitor to gold, but diversification in investment cannot completely eliminate risk

ChainCatcher news, according to Morningstar, Edmund Moy, the senior IRA (Individual Retirement Account) strategist at the US Money Reserve, the main distributor of precious metals for the US federal government, stated that on the surface, Bitcoin could become a competitor to gold, as both are alternative assets that can help reduce risk in traditional portfolios. Cryptocurrency bulls have long touted Bitcoin as "digital gold," and Federal Reserve Chairman Powell recently remarked that Bitcoin is "like gold."

Edmund Moy believes that their "differences outweigh their similarities," and that "the correlation between gold and Bitcoin is not strong." Given the uncertainty in the coming year, this may be the strongest reason for investors to hold both.

Nevertheless, Edmund Moy stated that investors seeking to diversify their portfolios should remember that diversification alone cannot completely eliminate risk, especially considering the volatility of Bitcoin.