For young investors, Bitcoin has replaced gold as a hedge against inflation, says a Wharton finance professor.
In an interview with CNBC Squawk Box, Wharton School finance professor Jeremy Siegel called gold's performance "disappointing" for 2021.
On the other hand, Bitcoin has been increasingly emerging as an inflation hedge among younger investors, Siegel argued:
The truth is, Bitcoin has replaced gold in the minds of many young investors as an inflation hedge. Digital coins have become the new gold for the Millennial generation. According to the story of gold, Bitcoin is the substitute for gold in the mind of the young generation.
In addition, Siegel pointed out that older generations experienced the inflation of the 1970s when gold soared. Currently, gold is no longer favored, he said.
The precious metal in 2021 posted its worst year in six years and a 5% decline to close the year at $1,800 an ounce did not meet investors' expectations in 2021, with gold failing to meet expectations as an inflation hedge.
Over the course of 2021, the pioneer crypto experienced massive price fluctuations, but it surged by over 60% by the end of the year.
Mark Cuban, the Dallas Mavericks owner, argued in October 2021 that Bitcoin is "better than gold" as several prominent global investors preferred Bitcoin over gold.
Sternlicht said that gold is actually "worthless" and that he owns Bitcoin due to governments printing huge quantities of money.
Even though many analysts believe that the flagship cryptocurrency is yet to prove its inflation hedge status, despite it becoming an increasingly popular asset against gold.