Did DBS say that Bitcoin is ‘like digital gold’?

By July 4, 2024 Business, Technology

We came across the following claim on a post on the social media platform X:

The post on X, by the account ‘Bitcoin Magazine’, states, ‘DBS says Bitcoin is “a bit like digital gold. You might want to allocate a little bit”’. DBS is Singapore and Southeast Asia’s largest bank, and the post’s mention of ‘allocation’ appears to refer to investment strategy.

The account ‘Bitcoin Magazine’ had a gold ‘verified account’ badge to indicate its status as an official organisation on X. Its X profile suggests that it is a media and news company focused on news in the cryptocurrency industry, calling itself the ‘most trusted voice in Bitcoin’.

However, the X post did not carry a link to the source of the quote, and we were unable to find an article regarding the topic on the Bitcoin Magazine website.

Unmasking the Quote

A keyword search revealed an article on the website Blockhead, a news site focusing on news in the blockchain and cryptocurrency industry, which reported on comments made by a DBS executive in response to Blockhead’s questions regarding the viability of Bitcoin and cryptocurrency for investing.

In the article, Blockhead reports that DBS ‘sees Bitcoin and cryptocurrencies as potential diversifiers for investors’ portfolios, but with some key considerations’. The article primarily relays comments made by Daryl Ho, a senior investment strategist at DBS, during its 2H2024 Chief Investment Office Market Outlook session.

Ho was quoted as saying that ‘Bitcoin’s limited supply makes it a compelling alternative (investment), mirroring gold’s scarcity’. ‘The profiles of Bitcoin and gold are quite similar’, he said. However, Ho’s comments were nuanced and accompanied by caveats, warning potential investors of the possible risks in the market.

Ho noted that Bitcoin had a lack of history as a proven store of value as compared to gold. He also emphasised the role of external factors in determining Bitcoin’s value such as economic conditions, government fiscal and monetary policy, and Bitcoin Halving, an event that takes place about every four years where the reward for mining Bitcoin is cut in half to reduce the supply entering the market.

Overall, it is clear through the quotes that Ho is expressing a note of caution despite the momentous growth of Bitcoin’s value in the past year. ‘The easy money has already been made’, he says. ‘If you want to make that quick buck in crypto, it’s not going to work for you so soon’.

To conclude, Ho says that he considers Bitcoin a long-term investment similar to gold, albeit with higher volatility. ‘It’s a bit like digital gold. If you are a bit more forward thinking you might want to allocate a little bit as a satellite play… but it’s not going to give you accelerated gains until you have the combined factors of the halving and the effects of either monetary or fiscal stimulus’. Parts of these concluding remarks appear to have been quoted in Bitcoin Magazine’s X post.

A ’satellite play’ is a term that derives from the ‘core-satellite’ investment strategy. In this strategy, the ‘core’ consists of low-cost, diversified assets that make up the bulk of a portfolio while ‘satellites’ are targeted investments that typically have higher risk and volatility with potentially higher returns.

We verified Ho’s identity by visiting his profile on LinkedIn, where he has written posts regarding the value of Bitcoin as an asset. He also wrote an article on the DBS Treasures wealth management and investment intelligence page in January this year, where he explained the reasons for Bitcoin’s impressive performance as an asset in 2023.

Mining for the Truth

Ho’s comments in the Blockhead article do include the quotes as represented in the X post. Moreover, he does appear to be speaking as a representative of DBS, reflecting its views on Bitcoin as an asset.

However, the comments appear to have been misrepresented by Bitcoin Magazine, which does not present the remarks in the full context, either by mentioning Ho’s caution regarding external risks, or by specifying Ho’s recommendations for Bitcoin to be a satellite investment.

As such, we find this post to be partially true, but misleading.

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