The ChatGPT Artificial Intelligence tool suggests a diversified portfolio for minimizing the impact of market downturns.
The ChatGPT tool, an artificial intelligence algorithm created by OpenAI, has chosen gold as a safe investment against market downturns, based on a report published in “Gold IRA Guide”. The algorithm does not recommend any allocation to Bitcoin in this report, which favors precious metals such as gold. Financial commentator Peter Schiff praises the bot for its recommendation of a 20% allocation to gold and other precious metals. The rest of the portfolio recommended by the bot is made up of bonds (40%), “defensive” stocks (30%), and cash (10%).
However, the AI bot’s answer may not necessarily be against crypto, nor a promotion of gold. ChatGPT stated that the choice of buying Gold or Bitcoin ultimately depends on the investor’s goals, based on its analysis of the intrinsic value and scarcity of each asset. Gold is considered a safe-haven investment and has a certain level of scarcity and intrinsic value, while Bitcoin is considered by many to be a speculative investment without any backing from physical assets or government.
The AI corpus of knowledge on which ChatGPT is based is current only through 2021 and does not include recent movements in the price of Bitcoin, which has seen significant ups and downs. As of now, both gold and Bitcoin investors are winning big, with each asset up respectively by 10% and 68% since the beginning of the year.
Gold and Bitcoin are often compared as forms of money due to their strong monetary properties, particularly scarcity, which theoretically makes them resistant to inflation or monetary debasement like fiat currencies. Both rose in March after the Federal Reserve bailed out Silicon Valley Bank depositors with hundreds of billions of dollars to prevent similar bank failures.
While Schiff takes the opportunity to double down on gold, many Twitter Bitcoiners, including his own son, disapprove. According to Decrypt, Schiff’s son believes that Bitcoin is “likely to demonetize gold in the long term”.
To sum up, ChatGPT recommends a diversified investment portfolio that includes gold as a safe-haven investment during times of economic uncertainty, but it does not necessarily imply that Bitcoin has no value. The intrinsic value and scarcity of each asset make them suitable for different investors based on their goals.