Gold will outperform the S&P 500 and bitcoin in 2022, Gareth Soloway predicts

view original post President and CFO Gareth Soloway joins Yahoo Finance Live to share his predictions on 2022, including how he thinks gold will outperform both the S&P 500 and bitcoin.

Video Transcript

ALEXIS CHRISTOFOROUS: The rally in crypto may have lost a little steam late last year, but Bitcoin still managed to rise 60% in 2021. So what does this year hold for crypto investors? Joining us now is Gareth Soloway, president and CFO at Always good to see you, Gareth. Thanks for being here. So a couple of days ago, we had the CEO of CryptosRus on. And he was saying that he thinks Bitcoin can reach $100,000 by the end of this year. Which camp are you in? Is this going to be the year that Bitcoin pulls back in a big way? Or are we going to see a further run-up?

GARETH SOLOWAY: Yeah, so I mean, I’ve heard that prediction. You know, it was supposed to happen in October, then November, then December. Long term, I love cryptocurrency, I love Bitcoin. But the charts– and I’m a technician– are just not showing that. We’ve seen Bitcoin hovering between 52,000 and 46,000 for the last month. And it keeps hitting on that 46,000 level. So on a technical basis, if you break below that level, that 46,000, which we’re kind of dipping a little bit now– we just hit 45,000– you are going to see downside to about 42,000, the low from early November.

KARINA MITCHELL: And then, sir, thank you for coming on with us today. It used to be as Bitcoin goes, so does the rest of the crypto market. But do you think all crypto is too risky? For example, what about Ethereum, where the returns have been massive, much more than Bitcoin was, for 2021? And, you know, it’s becoming more mainstream as a sort of tool for blockchain.

GARETH SOLOWAY: Yeah, I think the use case for Ether and Ethereum, you know, it definitely gives it a little bit of an extra push to be potentially bigger and maybe grow and meet Bitcoin’s market cap over the longer term. But honestly, what we’re seeing here is just so much froth in the cryptocurrency market. And one of the concerns I have not only for Bitcoin, but a lot of the other altcoins is that the stock market is just coming off all-time highs, hitting new highs over the last couple of weeks.

And cryptocurrency continues to falter. We see Bitcoin substantially off those highs. So there’s some little disconnect going on here with cryptocurrency as a riskier asset. And I do worry that it, including Ethereum, will start to see further downside. And again, I have it priced in. Bitcoin for me has a nasty head and shoulder pattern on it. Believe it or not, I think in 2022 or early ’23, you could see a move down sub 20,000 in Bitcoin.

ALEXIS CHRISTOFOROUS: So then are you not of the belief that it’s going to continue to take market share away from gold as digital assets– you know, the adoption of digital assets become more popular?

GARETH SOLOWAY: Yeah, so gold to me is an underrated asset right now. In fact, it’s– for my projections and my forecast for 2022, I actually have it beating the S&P 500, as well as Bitcoin, for this year. Now longer term, Bitcoin is going to be the place to be. So I think, you know, you look five years out, Bitcoin easily is at $100,000, maybe even $250,000. But for me, I’m looking at the leverage in the system, including the stock market. We’re seeing the Federal Reserve absolutely come out and say, hey, we’re going to reduce our balance sheet. We’re going to taper. We’re going to raise interest rates. That’s going to take a lot of money and liquidity out of the system. And Bitcoin and cryptocurrencies are going to see their dot com moment over the next year or two.

KARINA MITCHELL: And then I’m just wondering as far as regulation. What sort of wrench does that further throw into things? Both here and abroad in China, there’s been so much regulation.

GARETH SOLOWAY: Yeah, the regulation is a tricky one, right? So I’m a big believer that the cryptocurrency sector needs some regulation. It just needs the right type of regulation. You know, if you’re going to see Bitcoin head towards $100,000 or $500,000 in the future, you have to have regulation that makes pension funds feel comfortable holding a small percentage on their investment portfolio, as well as other hedge funds out there.

So I think that you’re going to see regulation. My hope is that it’s going to be the right type of regulation. The fact that Texas has become such a mining hub, I think the jobs there, the kind of impact on the economy is making it more likely that the regulation will be a positive thing for cryptocurrency in the longer run. But it needs to happen.

ALEXIS CHRISTOFOROUS: But Gareth, for people who want some exposure to this space longer term, is Bitcoin really the only crypto that you need? Or what else should be part of that portfolio?

GARETH SOLOWAY: Yeah, so I think I generally go towards the top 10 of the cryptocurrency in terms of market cap. I strongly encourage the same metrics as investors do for stocks, which is diversification. Look at the top. You don’t know necessarily which ones are going to be the top winners longer term. So spreading money across those top 10 or 20 is probably the right move. I do think that Ether, Ethereum, and Bitcoin should be the largest holdings based on the fact that, I mean, if you look at a stock portfolio, probably Microsoft and Apple, some of those are the biggest portfolio holdings. But you definitely want to spread a little bit amongst some of the lesser known ones, just in case they become the dominant force in the future.

ALEXIS CHRISTOFOROUS: All right, Gareth Soloway of, thanks for sharing your thoughts on where you think crypto is headed this year.