Veteran macro investor Luke Gromen believes Bitcoin (BTC) is set to outperform gold even even if it doesn’t have the backing of the US government.

In a video posted on the Forest for the Trees YouTube channel, Gromen says Bitcoin has a huge leg up against gold due to its fundamentals.

But while the macro expert is more bullish on BTC, he notes that investors should consider Bitcoin’s tendency for wild price swings when allocating capital to the top crypto asset by market cap.

“Support or no support from the government, I would expect Bitcoin to rise versus gold over time on face-peeling volatility that needs to be accounted for by most investors on a position-sizing basis. 

That’s precisely what happened. If you call up a chart, this isn’t speculative. You call up a chart Bitcoin over gold, Bitcoin has crushed gold on face-peeling volatility. So that makes sense.

Bitcoin has a higher stock-to-flow ratio, it has an energy tie like gold does and Bitcoin has a growing network effect. As long as that growing network effect continues, then I don’t see any reason that that would change regardless of whether administrative continues or not.”

The stock-to-flow model (S2F), traditionally used for commodities, predicts the performance of an asset based on the idea that the price increases as the asset becomes more scarce. Bitcoin has a higher S2F ratio than gold due to halving events, when BTC miner rewards are cut in half, reducing the number of new coins hitting the market.

At time of writing, Bitcoin is trading for $90,593, up nearly 2% on the day.

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