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ChatGPT Choosing Gold Over Bitcoin for Recession Resistance

ChatGPT Choosing Gold Over Bitcoin for Recession Resistance

Artificial intelligence tool ChatGPT seems to have taken sides in the long-running debate over the respective value of gold over Bitcoin as a good investment. Financial commentator Peter Schiff praised the leading generative text engine for reportedly favoring gold.

“AI is indeed quite intelligent,” he tweeted on Wednesday. “It does not recommend any allocation to Bitcoin.”

ChatGPT recommends a 20% allocation to gold and other precious metals to minimize the impact of market declines. The rest of its hypothetical portfolio consists of bonds (40%), “defensive” stocks (30%), and cash (10%) – with no mention of Bitcoin.

However, the AI bot’s answer may not necessarily be a blow against crypto, or a promotion of gold. When Decrypt directly asked its opinion on “Gold or Bitcoin” on April 6, ChatGPT said that the choice of which to buy ultimately depends on your investment goals.

“[Gold] is a tangible asset that is considered a safe investment during times of economic uncertainty,” he said, “Gold is a finite resource and is difficult and expensive to mine, which gives it a certain degree of scarcity and intrinsic value.”

The bot compared the historic money to Bitcoin, which is “not backed by physical assets or governments” and “considered by many to be a speculative investment.”

“Gold may be a better choice for those looking for a stable, long-term investment, while Bitcoin may be more suitable for those looking for high-risk, high-return investment opportunities,” it concluded.

It’s also worth noting that the corpus of knowledge that ChatGPT is basing its current forecast on only goes up to 2021, and likely excludes the significant movements – both up and down – that have occurred in Bitcoin’s price since then.

Both gold and Bitcoin investors are winning big this year, with each asset up 10% and 68% year-to-date respectively. The price of gold just crossed a multi-year resistance level at $2,000 per ounce, which Schiff said could now serve as “a launch pad for a big jump,” according to a tweet on Thursday.

Gold and Bitcoin are often compared as forms of money due to their strong monetary properties – particularly their scarcity, which theoretically makes them as resistant to inflation or monetary weakening as fiat currencies. Both assets surged in March after the Federal Reserve bailed out depositors at Silicon Valley Bank, injecting hundreds of billions of dollars into the banking system to prevent a similar bank failure.

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