Gold and Bitcoin- Besties or Enemies?

[GoldCore]

Below is a graph of the gold price and Bitcoin since the beginning of the year. Many of the investors in gold and Bitcoin agree that money printing by central banks should stop.

They also agree that governments should help people with special programs during a crisis but that once a crisis ends the government should repay the money it borrowed.

No one who owns these investments wants to see governments borrow money every year forever [which is what they have done and plan to do still].

Gold V/S Bitcoin Chart

The above paragraph is a list of what investors in gold and Bitcoin agree upon.

However, most of this year the price of gold and Bitcoin have moved in opposite directions – when gold is rising bitcoin is declining and vice versa.

Although there are some agreements among investors that both investment choices offer the same alternative to central bank cash, there are many that strongly believe that one is better than the other. 

Gold V/S Bitcoin

Some bitcoiners like Michael Saylor are using social media to tell everyone that gold and silver are going to zero because bitcoin ‘replaces’ them.  Demographics play a big factor in determining if someone owns bitcoin versus gold (or silver).

Younger generations tend to own bitcoin because technology is more trusted by them than by old people – and they are looking for a quick rise and outlandish returns.

Baby boomers have more wealth to protect, they understand that wealth must be passed down to generations and that gold and silver has stood the test of time. They also have experience with declining markets and tax changes.

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Baby Boomer gold bulls like Peter Schiff understand governments cannot easily tax physical metal holdings, but that digital blockchains are completely open for governments to study and tax.

Also, let’s now talk about things Bitcoiners and physical metal owners disagree about.  Electricity is a big one! How can bitcoin be a storage of wealth if a simple blackout means you cannot spend it, or buy it, or even prove that you ‘own’ it?

And what exactly does it mean to ‘own’ bitcoin?  If your bitcoin gets stored on an app offered to you by some platform company or brokerage, you don’t actually own anything.

And there is no way to convert Bitcoin into any type of physical form. Physical metal is the only thing that you truly own because it requires no broker, government, or app, not even electricity to be wealthy. Moreover, this argument was made by Peter Schiff in a Twitter reply to Elon Musk.

Peter Schiff Tweet

And one further tweet on the electricity issue and Bitcoin.

Electricity Issue and Bitcoin Tweet

And then there is the problem of forgotten passwords or destroyed drives that make Bitcoin unretrievable – and with other cryptocurrencies that have seen sharp rises, such as Shiba, there is the question on where it can even be converted into a usable form.

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As stated above, many Bitcoin and gold investors hold these assets for many of the same reasons. However, there is the main distinction that Bitcoin is entirely digital, and gold is a physical asset.

There can be a place for both Bitcoin and gold in a portfolio, but the volatility and digital nature of bitcoin do not make it a substitute for gold in a portfolio.

Besties or Enemies?

Globally, Central Banks have two levers in their quiver to assist in guiding an economy, fiscal and monetary policy.  Fiscal policies (such as the recently passed Infrastructure Bill in the U.S.) seeks to boost employment and economic activity through increased spending by the government.

Through monetary policy, Central Banks see to stimulate activity by lowering or increasing policy interest rates. It is our view that global governments and Central Banks will never allow independent cryptocurrencies to gain traction to the point that their monetary or fiscal policy levels are weakened. 

As an example, the ability for citizens to pay taxes and/or receive entitlements via independent cryptos is highly unlikely. 

However, we do see the government issuing their own digital currencies in the future as the power of these policy levers are maintained.

Central banks buy gold and hold gold to preserve wealth because gold does not belong to anyone else. Central banks will never ‘issue’ their own gold because they cannot make gold, only supernovas do that.

So, it seems bitcoin and gold are besties, standing together against needless money printing. But like brothers and like enemies they disagree loudly when comparing themselves to one another in search of supremacy.

[Bigmarc]

1 hour ago, GoldCore said:

Michael Saylor are using social media to tell everyone that gold and silver are going to zero because bitcoin

Did he say that? Post a link please. Both your Twitter posts seem edited too can you post the originals too. Also a quick Google gives out different charts. 

1 hour ago, GoldCore said:

As an example, the ability for citizens to pay taxes and/or receive entitlements via independent cryptos is highly unlikely. 

Can you do this with gold and silver? 

When I own gold and silver I generally feel safe and secure inside. It's a different investment vehicle to crypto. Crypto has only been around for a few years nobody knows it's potential, to compare the two is pointless.

 

[modofantasma]

38 minutes ago, Bigmarc said:

Did he say that?

Peter schiff said Saylor had been saying that too actually I think it was one of his podcasts last week. I don't know much about Saylor but occasionally listen to Schiffs videos 

[Bigmarc]

23 minutes ago, modofantasma said:

Peter schiff said Saylor had been saying that too actually I think it was one of his podcasts last week. I don't know much about Saylor but occasionally listen to Schiffs videos 

I have seen him talk about the business model of gold mining but not being as bold to say gold and silver will be at zero. 

 

[modofantasma]

1 hour ago, Bigmarc said:

I have seen him talk about the business model of gold mining but not being as bold to say gold and silver will be at zero. 

 

Thanks, ep749 on Schiffs YT channel it was mentioned. 

[Roy]

5 hours ago, GoldCore said:

Some bitcoiners like Michael Saylor are using social media to tell everyone that gold and silver are going to zero because bitcoin ‘replaces’ them.

Gold and silver can never go to zero because I will always pay £1 an ounce for it.

(I stole this but can't remember who from to give credit 👍)

[Coverte]

2 hours ago, Bigmarc said:

I have seen him talk about the business model of gold mining but not being as bold to say gold and silver will be at zero. 

 

"In 2001, Fortune Magazine published a list of the top losers of the Tech Bubble.

Ranked #1 was none other than Michael Saylor, who had a whopping $13.53 Billion LOSS!

MicroStrategy's shares went from $3300 to $4 (-99.99% decline), and SEC even accused him of fraud."

When someone pointed this fact out on his Twitter feed, that Michael Saylor own financial history was not exactly stellar, he blocked them 

To his credit, Saylor was 35 and has hopefully learned a lot from that in the subsequent two decades.

[Bigmarc]

7 minutes ago, Coverte said:

"In 2001, Fortune Magazine published a list of the top losers of the Tech Bubble.

Ranked #1 was none other than Michael Saylor, who had a whopping $13.53 Billion LOSS!

MicroStrategy's shares went from $3300 to $4 (-99.99% decline), and SEC even accused him of fraud."

When someone pointed this fact out on his Twitter feed, that Michael Saylor own financial history was not exactly stellar, he blocked them 

To his credit, Saylor was 35 and has hopefully learned a lot from that in the subsequent two decades.

Yes that bubble got me as well, I had a fair bit in Marconi, put me off shares for life. I am not being a advocate for Michael saylor but I have seen a few of his interviews and find it hard to believe that tabloid/clickbait comments would come out of his mouth. That is more a Peter Schiff angle

[Coverte]

2 minutes ago, Bigmarc said:

Yes that bubble got me as well, I had a fair bit in Marconi, put me off shares for life. I am not being a advocate for Michael saylor but I have seen a few of his interviews and find it hard to believe that tabloid/clickbait comments would come out of his mouth. That is more a Peter Schiff angle

I don't think Peter Schiff is a very good proponent for Gold personally, he gets angry far too easily and makes stupid mistakes too often in his replies IMO.

With that said, I would not want to gamble my entire life and Company on Bitcoin either (as Saylor is doing), nor anything else come to that.

I'm very happy I bought some BTC when I did, but don't pretend it was because I saw the future mega growth, it was just a small punt at the time which has worked out far better than some other speculations I have thrown a couple of k at.

[HerefordBullyun]

20 minutes ago, Coverte said:

I don't think Peter Schiff is a very good proponent for Gold personally, he gets angry far too easily and makes stupid mistakes too often in his replies IMO.

With that said, I would not want to gamble my entire life and Company on Bitcoin either (as Saylor is doing), nor anything else come to that.

I'm very happy I bought some BTC when I did, but don't pretend it was because I saw the future mega growth, it was just a small punt at the time which has worked out far better than some other speculations I have thrown a couple of k at.

I agee with your sentiment about schiff - hes very old man shouts at BTC. But given that said he knows economics, but he is your gold pumper too!

I have faith in anything outside a fiat scheme. Even artifacts like laminated 1st colour edition of nudey parade magazine!

Salyor has been bankrupt many times. He just goes all in all the time. Balls like coconuts.

Edited November 18, 2021 by HerefordBullyun

[dicker]

30 minutes ago, Bigmarc said:

Yes that bubble got me as well, I had a fair bit in Marconi, put me off shares for life. 

Marconi was a proper disaster. The management sold off the core parts of their business to go into a new territory that they didn’t properly understand.  Then came the dot com crash and destroyed the business.  All happened in under 2 years if I remember correctly.  

[Bigmarc]

12 hours ago, dicker said:

Marconi was a proper disaster. The management sold off the core parts of their business to go into a new territory that they didn’t properly understand.  Then came the dot com crash and destroyed the business.  All happened in under 2 years if I remember correctly.  

Yes, very quick. In the end they issued me with a hand full of shares and warrants that were worth next to nothing for the new company tellent. I have a long history of being c**p with shares. Gulf keystone petroleum, Barclays and a couple of others that disappeared of the face of the earth. I did win of a few but only short term. I have considered having another go due to the easy of doing it now with apps ect but I tend to be a get burned and move on kind of guy. Metals have been the only safe investment for me. I have now dipped my toe in to the crypto world, I have been in a year now. Currently my only conclusion is that it's not the same investment vehicle as metals and I get humpy when people try to compare the two. If you want safety then turn to metals. I don't think crypto will ever be adopted as money by the masses in its current form.