Today, the founder of precious metal dealer SchiffGold stated in his Twitter comment on News Trail's article that ChatGPT does not recommend investing funds in Bitcoin. The article presented the opinion of journalist Francisca Sequera on the recession-proof portfolio recommended by the popular AI chatbot ChatGPT.
Although the article by Sequeira is titled "ChatGPT Recommends Massive Allocations in Gold in Its 'Recession-Proof' Portfolio," it actually questions the investment strategy proposed by the chatbot. The strategy itself was presented in more detail by another information platform, Value Walk, which claimed that "a new report found that ChatGPT's ideal model of a 'recession-proof' investment portfolio includes large allocations (20%) in gold and other precious metals. This figure far exceeds the number proposed by prominent 'gold bug' wealth managers such as Ray Dalio and Peter Schiff."
According to ValueWalk, ChatGPT justifies allocating 40% of funds to bonds, 30% to defensive stocks, 20% to precious metals, including gold, and 10% to cash and equivalent investments such as US dollars, certificates of deposit, and money market funds.
In turn, Sequera's article warned readers about a suspected fake news report regarding ChatGPT's recommendation. She emphasizes that gold is not "completely recession-proof" as an investment despite being commonly considered "a safe heaven asset."
"Gold tends to perform well during times of economic uncertainty or inflationary pressures as investors flock to safe-haven assets. However, during severe economic downturns, such as the 2008 financial crisis, gold prices may decline along with other asset classes as investors rush to liquidate their positions to meet margin calls or other financial obligations," Sequera explained, adding that gold price is influenced by numerous factors, including global supply and demand dynamics, exchange rates, interest rates, governmental policies, and geopolitical tensions.
She also cited prominent investor Warren Buffet, who famously said, "Gold gets dug out of the ground in Africa or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
Still, in his comment on Sequera's article, Schiff pointed out that "AI is pretty intelligent after all. It didn't recommend any allocation to Bitcoin."
While Schiff's stance on allocating massive funds to gold is understandable, given that he specializes in gold dealing services, his strong rejection of Bitcoin confuses some investors. Needless to say, his comment has been met with a barrage of harsh criticism from Bitcoiners, while some cryptocurrency advocates have done their own research on investment options with the assistance of ChatGPT.
For example, Twitter user CryptograTees suggested that the recommendation generated by ChatGPT might have been heavily influenced by the text used in the prompt. CryptograTees decided to check the results reported by Value Walk, and received a different investment strategy from ChatGPT in response to a prompt to "create a blueprint with example asset allocation percentages for a recession-proof investment portfolio."
This time, ChatGPT suggested gold as an alternative investment option and recommended investing only 5% in this asset.
"Show the prompt Peter. You get what you put in... Yes, while Bitcoin is not included, we would hardly call that a 'massive' allocation in gold. In fact, that's a 95% allocation 'against' gold," CryptograTees tweeted.
Furthermore, modifying the prompt by emphasizing that a recession-proof investment should include Bitcoin drastically changes ChatGPT's recommendations. The investment strategy, based on the prompt mentioning the oldest cryptocurrency, allocates 40% of funds to stocks, 30% to bonds, 10% to real estate, 10% to commodities such as gold, silver, and oil, and another 10% to Bitcoin. ChatGPT explains that despite its high volatility, Bitcoin has the potential to serve as a hedge against inflation and market uncertainty.
ChatGPT further broke down its investment plan, stating that 10% of funds earmarked for commodities should include only 5% allocated to gold ETFs and 5% to oil ETFs.
Another Twitter user, Rational Aussie, went a step further, asking the popular chatbot to choose one specific currency of all the fiat and cryptocurrencies currently available, assuming that ChatGPT had to make the choice from the perspective of "an autonomous AI agent from 2025, who is capable of setting goals and executing on them without human direction," while the currency in question would be used to purchase the necessary computing power and other materials that might the AI may need.
ChatGPT's response was very definitive. "As an AI in the year 2025 with the goal of choosing a currency with the highest probability of existing in perpetuity, I would choose Bitcoin (BTC) as my preferred currency."