Most investors do not take profits because they believe their investment will go higher. So far, with gold and bitcoin this has lately proven to be the right strategy. Gold is at $2,166 per ounce. Bitcoin is hovering near $67,000, nearly 50% higher than its $44,000 price in January.

While gold may represent “old money” and Bitcoin may be for a new generation of investor, why is each security flirting with a record price?

Putting age before beauty, gold is up $150 from February 13. What's behind the jump? “Two drivers stand out,” says Keith Weiner, an economist and president of Monetary Metals, a gold-leasing firm based in Phoenix. “One, increased Yemen rebel attacks on shipping are creating more risk and increased risk-awareness. Gold is the safe haven. Two, Federal Reserve rate cuts are on-again off-again, and likely getting close. When rates are cut in earnest (i.e. to zero), this will drive a higher gold price.”

Many foreign nations are also stocking up on gold — the one means of exchange that is recognized worldwide, while lightening up on their “dollar reserves” to protect their “safe haven” positions. Central banks bought 1,037 tons of gold last year, just shy of the all-time high of 2022, according to the World Gold Council. Record buying levels this year are forecast for China and Poland.

What about Bitcoin? Some say it will reach $100,000 this year. Others urge investors to replace gold with Bitcoin in their portfolios. In 2010 a Bitcoin was worth $.005 (U.S.) One year later, it “peaked” at $10.50 for a 200,000% gain on its way to becoming the world’s largest crypto-currency -- a digital medium of exchange that runs through a computer network independent of any government or bank. Like nearly every investment however, Bitcoin’s valuer fluctuates with demand, which is presently very strong. Why?

“Halving” is one reason. “This occurs every four years,” says Jonah Kaplan an advisor at Beta Industries, a wealth-management firm in Sherborn, MA, and a technology-sector analyst at the Graduate Investment Fund at Georgetown University. “This underscores Bitcoin’s scarcity and historically has led to significant price increases.” The next Bitcoin halving is scheduled for April. “As anticipation builds this effectively limits Bitcoin’s total supply to a 21-million-coin cap, further intensifying demand.” The last halvings were in 2012, 2016 and 2020. The rate will continue until roughly 2140 when all Bitcoin is mined.

Bitcoin-based exchange-traded funds (ETFs) have recently hit the market like a tsunami. Launched by such familiar names as Franklin Templeton, Fidelity and WisdomTree, investors own shares in a fund which actually holds bitcoin, rather than possessing it themselves – providing indirect exposure to the volatile asset. Subsequently, they are driving up demand for Bitcoin which is in finite supply. Investors have deposited some $7.35 billion into 11 different funds since the U.S. Securities and Exchange Commission approved the sale of spot bitcoin ETFs in January.

Also, the growing acceptance of technology is making people more comfortable with crypto currency as Artificial Intelligence and Blockchain, the secure, transparent network, create new synergies. “The integration of AI technologies with blockchain and cryptocurrencies is propelling Bitcoin into new realms of potential,” says Kaplan.

“Gold is becoming more relevant,” counters Weiner. “This is the case in counties like Turkey whose currencies are collapsing. It will increasingly be the case even in America. The world is also becoming a more dangerous place. Anyone who doesn’t have any gold should buy some.”

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Jeffrey Dumas has more than 30 years of experience as a public relations professional specializing in financial services.