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XRP, Bitcoin, Solana, and Ether are incredibly popular cryptocurrencies these days, especially with the markets being as choppy as they are. Although the crypto markets did sink this past week in sympathy with the stock markets, they have done a better job of holding their own versus the likes of some of the more speculative stocks out there (look no further than Cathie Wood’s ARK names).
Indeed, the main draw to crypto assets like XRP is that they can help you not only store wealth, but build it and over a near-term time span!
Why settle for storing wealth when you can grow it and at an above-average rate? With markets in a correction, crypto could go either way. I can’t say I’m a fan of how correlated the crypto markets were to common stocks during the 2020 stock market crash. While next time may be different, I would take a raincheque on buying crypto over assets like gold if you’re preparing for a further volatility storm and a potential bear market.
XRP: A popular cryptocurrency that may not be right for most
Gold has been around for a very long time. Crypto like XRP, though, is essentially still in its infancy. Could it be the next gold or even a better form of gold for alternative investors? Sure, but its track record is a major question mark in my books. That’s why I wouldn’t look to assets like Bitcoin or XRP as a safe haven. As we found out two years ago, it can crumble just like stocks can. Worse, it can fall under its own footing, without having to follow broader stock markets lower.
Gold, on the other hand, has done pretty well during this 2022 stock market correction. As geopolitical tensions surge, I expect gold to rally toward the US$2,000 per ounce mark. As for crypto assets, I have no idea. I still view them as more of a speculative play like a growth stock than a safe store of wealth like precious metals.
So, unless you’re looking to add risk, XRP may not be the ideal choice at this juncture for prudent investors looking to fight off both inflation and market volatility.
Without further ado, consider the following value stock I’d rather own over an asset like XRP at this juncture:
I’m a huge fan of gold at these levels, especially for those who lack exposure. You see, gold and crypto like XRP may share some attributes. Arguably, XRP has been a more profitable investment. But moving ahead, nobody knows what could be in the cards. As we learned over the past two years, momentum works both ways. One should not expect incredible rallies to last forever without the occasional pullback.
As the Ukraine-Russia crisis boils over, while the risk appetite fades, I think a Goldilocks (pardon the pun!) environment could be setting up for gold. And there’s no better place to play it in my opinion than Barrick Gold (TSX:ABX)(NYSE:GOLD), a $52 billion behemoth that knows the business like few others. It’s a top miner that will amplify any gains experienced by gold prices.
On the flip side, any pullback in gold (some pundits see gold falling to US$1,600 by year-end once volatility fades) could be detrimental to Barrick stock. Regardless, I think most of the damage has been done and view the 1.75% yield of Barrick as a nice bonus for investors looking to get paid while they wait. Getting a nice dividend alongside an inflation and volatility hedge is pretty much an ideal proposition for most investors these days, especially the gold doubters who are giving the precious metal a second look!
Compared to XRP, I believe the risk/reward is far better. Of course, I could be wrong, but in terms of risk, I’d be looking to take a bit off the table here, as volatility takes it to the next level.