Gold is old, cash is trash, and Bitcoin is king
There was a time when it made sense to hold gold in one's portfolio. It was the de-facto choice for a store of value investment.
The schmuck insurance that was most readily available to be held in one's portfolio.
Just in case this whole un-backed fiat experiment eventually failed, which it was destined to anyways, portfolios wouldn't be absolutely wrecked as things priced in that worthless fiat would be pretty much priceless by extension.
However, we are now coming to a point where gold is just old.
I'd have to get the exact numbers, but something to the tune of 90% of it's value comes from its use case as a store of value investment. It has tremendous industrial properties but that only accounts for a small percentage of its total value.
There is a very real chance the the demise of the dollar has already begun.
Again I'd have to get the exact numbers but I read a statistic the other day about the average length of time a fiat currency has enjoyed world reserve currency status throughout history.
That average came to something like 92 years.
With the dollar we are already past that point.
This would indicate the dollars days are numbered based on historical trends.
So, if the dollar is set to decline over the coming years for a host of reasons, not just related to a historical trend, then things priced in dollars should do well.
Ok, so gold should do well then! Nope, not relatively speaking...
(Source: https://www.pinterest.com.au/pin/337347828314043087/)
When it comes to investing, the you want to own the fastest horse, and if not the fastest horse you want to own one of the fastest horses.
Basically you just don't want to own the slowest horse.
While bitcoin has enjoyed its status as a store of value, that status is set to change going forward with a better store of value available, and that's bitcoin.
Bitcoin is better than gold on literally every metric except its track-record/history as a store of value. It's the only metric gold has on bitcoin currently.
The largest hodlers of gold currently are central banks and then large wealthy institutions/families etc. These investors have a portion in their portfolios which consists of store of value investments.
Gold makes up a large percentage of that portion of their portfolio.
However, as they add the better store of value in bitcoin, their allocation to gold will have to drop to keep the same portion of their portfolio in store of value investments.
For example, lets say a fund has 3% of its holdings in gold, and they decide they want to take a 2% allocation to bitcoin, in order to do that will they will drop their 3% allocation in gold to 1%. This is just a very crude example to give you an idea of what is coming.
The more popular bitcoin gets, the less popular gold will become as a store of value, again relative speaking.
Gold could go up in dollar terms, but will greatly under-perform just about everything else going up in dollar terms.
That is why not only will gold be the slowest horse in the store of value investment race, but it's likely to be the horse with the broken leg and bitcoin's loading the shotgun.
Once these large holders of gold start to transition to bitcoin, the under-performance of gold will be even more apparent than it is already.
Gold is simply old, cash is trash, and bitcoin is king.
See you north of $10 trillion market cap for bitcoin in the not too distant future!
Stay informed my friends.
Image Source:
https://grizzle.com/2020-the-year-bitcoin-became-investable-for-institutions/
-Doc
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Maneco64 downvoted. He's a gold merchant and didn't like your post. Hah.
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Sometimes the truth hurts... :)
If I had gold and silver, I don't think I would sell them just yet. Bitcoin still relies on outside infrastructure. The internet and power grid are fairly robust, with redundant options, but they are not everywhere. Additionally, there is a lack of true anonymity with most coins, and if government ramps up authoritarianism in response to economic collapse, privacy coins are too niche to be useful. Here in the US, the normies will probably understand silver dimes. Crypto? We'll see. So I still think it's a good hedge depending on what kind of collapse pattern and response you anticipate.
As an investment, it's a poor investment. As a hedge, it's also mostly a poor hedge. I admit there are exceptional situations that it might work, but they are few and far between. Even in an apocalyptic scenario that most people promote gold in, where the power grid has gone out and we have gone back to the stone age, people will want food, clothes, weapons, cigarettes, things they can use etc. They won't want a shiny metal that mostly just sits under their bed...
History does not agree - all it takes is hyperinflation - coming to America this year!
It's all relative. If the chart of gold were to look like that but bitcoin and just about everything else priced in dollars was up many multiples of that, it's still a bad investment. Picking gold is akin to picking the slowest horse, which is my point.
Also worth noting, a better alternative did not exist during the last inflationary environment, it does now in bitcoin.
bitcoin the best coin! 😊
That is why not only will bitcoin be the slowest horse in the store of value investment race, but it's likely to be the horse with the broken leg and I'm loading the shotgun.
Did you mean gold? I like what you are saying here. It makes some good sense. I personally don't own any precious metals, but I do own BTC, so I guess I am ahead of the curve!
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Good catch, yep that was supposed to read "gold will be the slowest horse", edited above.
Not seeing the edit yet here.
try refreshing
Guess what i put my crypto gains into?
Yes!
I probably don't need to guess do I...
Again this isn't a trade recommendation. This is an overall trend over the coming years. The chart on gold currently looks like it could pop in the near term, in fact I bought some GLD the other day. However, over the next 10 years it's not a trade I'd like to be long in.
A motocross bike is great for going up and down (cryptos)
A truck is best for the long haul (gold)
I think you are trying to haul goods on a KLX450, while paying out on trucks for being crap at jumping!
That was true in the past, until a better store of value was created. Now that it's here that truck is going to be trying to travel with several flat tires. It may still crawl forward, but it will likely be a crawl and slower than many other things priced in dollars.
Thanks for information.