Bitcoin better than gold in a bull market, says billionnaire Stan Druckemiller

“I assume we’re going to have a recession sometime in 2023,” said the Duquesne CEO

Bitcoin coin and a gold nugget                                 
Duquesne CEO Stan Druckenmiller has been weighing up the pros and cons of Bitcoin and gold – Photo: Shutterstock
                                

Stanley Druckenmiller, the billionaire chairman and CEO of Duquesne Family Office, has argued that Bitcoin is a better investment than gold in an inflationary bull market, but that the yellow metal is preferable in the context of a bear market. 

Druckenmiller

Speaking at the Sohn Conference Foundation, Druckenmiller said: “If you believe we are going to have an irresponsible monetary policy and inflation going forward. If it’s in a bull phase, you want to own Bitcoin. If it’s in a bear phase for other assets, you want to own gold.”

He added: “If I think we are going to have an inflationary bull market, I would want to own Bitcoin more than gold. If I thought we are going to have a bear market – you know, stagflation-type things – then I would want to own gold.” 

Inflation

In May, inflation in the United States reached a 40-year high of 8.6% year-on-year. 

At the height of the Covid-19 crisis, the Federal Reserve embarked on a course of substantial quantitative easing and record low interest rates. Although this is thought to have contributed to runaway inflation, the Russian invasion of Ukraine has also played a substantial part. 

The sanctions imposed in the aftermath of the invasion have particularly heightened global energy prices. At the end of last week, the average gasoline price in the US hit $5 for the first time ever.

Having ended its market support, the US central bank (the Federal Reserve) announced its largest interest rate hike since 2000 last month, and is expected to raise rates further. 

A similar phenomenon has been seen right across the developed world. Last week, European Central Bank (ECB) president Christine Lagarde announced her intention to raise interest rates above zero for the first time in a decade by September. 

Inflation in the eurozone rose to a record high of 8.1% in May, four times higher than the central bank’s 2% target. 

Recession

Druckenmiller, who was previously the managing director of Soros Fund Management, observed: “My best guess is that we’re six months into a bear market. For those tactically trading, it’s possible the first leg of that has ended. But I think it’s highly, highly probable that the bear market has a ways to run.”

He added: “Given the extent of the asset bubble and the destruction in the markets, given what’s going on in Ukraine, given a zero-Covid policy in China, I don’t take a lot of comfort from that. So I assume, and pretty strongly, soon we’re going to have a recession sometime in 2023.”

Further reading

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