Ardoino's Equation: Why Holding Bitcoin and Gold May Be the Key to Avoiding Market Doom

Tether's CEO Paolo Ardoino recently tweeted that holding Bitcoin and gold is key to avoiding financial or economic 'doom'. This equation, which he referred to as 'Bitcoin + Gold = hedge against doom', suggests that these two assets are a safe haven for investors during times of market jitters.

Ardoino's comments come as the price of Bitcoin has risen 23% in the past 30 days, while gold is up 15%. However, this increase may not be entirely due to the properties of Bitcoin itself, but rather its correlation with other assets that investors often hold during times of uncertainty.

Historically, gold has been a reliable store of value and hedge against inflation. Its scarcity, acceptance across different civilizations, and inability to be printed like money make it an attractive asset for investors seeking stability. However, over the long run, the price of gold tends to be relatively stable, providing little growth even in periods of high growth.

Bitcoin, on the other hand, has not performed well against inflation in recent years. During the 12 months ended August 25, its price is down 30%, while the US Consumer Price Index (CPI) is up by 3.4%. In the same period, gold is up by 39%.

Despite this, Ardoino still recommends holding both Bitcoin and gold in a portfolio. He suggests that a 5% allocation to each could help soften the blow of any adverse market conditions.