Egyptian billionaire businessman Naguib Sawiris has disclosed that he does not intend to invest in cryptocurrencies, especially Bitcoin, underscoring that gold remains a strong investment and provides a solid hedge against inflation.
His statement comes at a time when the world is concerned about inflation due to the impact of global supply chain disruptions on consumer price levels. Investors are searching for assets that provide sound protection and an investment hedge against inflation.
The Egyptian businessman, who has a $3.1-billion net worth, chairs Orascom Investment Holding, an Egyptian company with investments in the telecom, media and technology sectors.
Aside from his governance roles in Orascom Construction and Orascom Development, Sawiris, who also chairs La Mancha Holding, a precious metals mining investment firm, recently launched a $1.4-billion gold mining fund under that company.
Meanwhile, counter to Sawiris’ investment ideology, some investors believe that gold has lost its luster as a hedge against inflation, while Bitcoin is paving the way in the 21st century.
Sawiris stressed that he is still bullish on gold as the asset remains a safe haven and strong hedge against inflation.
He believes people comparing Bitcoin and gold are making the wrong comparison, as gold has a track record of improving risk-adjusted returns over long periods, while reducing volatility.
How gold and Bitcoin have performed this year
Bitcoin, the flagship cryptocurrency asset, now trades at $65,476, very close to its all-time high of $68,997 that was recorded yesterday, Nov. 10.
At the current price valuation, the year-to-date return of the leading cryptocurrency has outpaced gold’s year-to-date substantially.
Since the start of the year, Bitcoin has increased by more than 125 percent in value, while the yellow metal is down by two percent since the start of 2021.
Sawiris issues warning to investors
Sawiris warned investors that an asset valuation bubble is looming on the horizon. This is because today’s rapid economic rebound and abundant liquidity are driven by stimulus spendings from governments and quantitative easing by central banks throughout the world.
“I think shares are overpriced and there will be a correction maybe next year, but it should be expected sooner or later,” he said.
The billionaire added that investors need to be selective about how they balance their overall portfolios and the stocks that they pick in equity markets, and well selected portfolio should always include technology stocks such as Amazon, Apple and Google.
“They still have very big growth potential, it will be very sound to have about 20 or 25 percent of tech stocks in your portfolio,” Sawiris said. “I think 20 percent in gold because is good because it gives you stability.”
