I’m no expert at Gold though I wouldn’t be the first or last person to make comparisons between Gold and Bitcoin. Sure both are minable and have a limited supply, but what about price trend similarities?
For Bitcoin fans who check the price daily, you will recognize the similarity of Gold’s parabolic rise from 250 USD to 1,900 USD between the years 2001 to 2016 and Bitcoin’s rise between September 2017 to present (albeit that Bitcoin pricing is x10 of Gold). The Gold price surge started back when the United Stated decided to embark on the hunt for a particular middle eastern man who apparently yielded massively destructive weapons, and ended in 2011 in what seemingly was a bubble. Other similarities to Bitcoin include: - The peak of 1,900 was viewed as a huge bubble just as the 20k price of Bitcoin was. - Gold also has little intrinsic value. - Gold has been refered by some as a relic, and Bitcoin is also showing signs of becoming a relic as newer technology emerges. - In a more limited way, Bitcoin has also been a flight to safely in certain countries experiencing fiat currency issues. The differences are: - Gold looks and feels great! - The evolving trend for Gold is observed across years rather than months.
Bitcoin leading Gold price trends? Bitcoin’s recovery from the December 2017 price correction has been similar to Gold. Gold so far has managed to rise back from about 1056 almost hitting 1400 and has since ranged just as Bitcoin bounced back from around 11,000 and started ranging between 13,000 and 16,000. Since Bitcoin price trends evolve faster, would Gold follow a Bitcoin's price recovery? I don’t see a relationship between the two markets currently though time will tell whether the similarities in the graphs would continue.
What about Tulips? Along with being compared with Gold, Bitcoin has also been referenced countless times to the Tulip and the potential to experience a similar crash to nothingness. So what will make Bitcoin not crash and survive across the centuries as Gold has? Gold bears marked differences between the Tulip and Bitcoin, that being it doesn't die and you can actually hold it and get warm fuzzy feelings. So if Bitcoin is to have a future, the demand for it must develop into what John Maynard Keynes referenced as a "Barbarous relic".
Bitcoin is rising again today . . . and Gold is hitting 1320. Fun times.
...and there is an even bigger difference between a 17th century localised fad surrounding a flower that can only live for weeks and a state of the art digital technology that requires thousands of hours of processing power and huge amounts of electricity to produce, which has become a global store of wealth as well as being the internet version 2.0 - upon which almost limitless applications and passive incomes can be built - you need to be a computer scientist to even come close to understanding what Bitcoin is -
Nom_de_Guerre
⋅
Bitcoin is a completely different animal to gold, the supply is finite not limited
PNUTTY
⋅
@Nom_de_Guerre, Thanks for your comments. I'm trying to give the thumbs up for them but I see there's no emoji's here.
Nom_de_Guerre
⋅
@PNUTTY, i maybe sound a tad dry, i do appreciate your detailed and thorough TA, way more work than i do on my posts...and i was late giving you a thumbs up, plus heres an emoji *) - I've had many debates explaining how gold can be mined very easily now compared to the past, and also how if the price was higher they would put the effort in to mine a great deal more - This is totally different to Bitcoin, it is not possible to mine more and the difficulty increases whilst the reward reduces - Bitcoin has been misunderstood and disregarded by the financial establishment who are only recently coming to realise how late they have left it to get in. If you aren't already aware of him you might find the posts of Richart Heart on YouTube interesting - Gold also is going to shock the market in the first 3/4 months of this year - Best regards and good luck to you
newatthis
⋅
@Nom_de_Guerre, No offense on this but Bitcoin is finite, so what? What's its actual value? If it's a currency, the point and value of a currency is to facilitate trade...how does something that costs 1000s per unit facilitate trade? Also, what stops people from just going to another currency and then another? No structure and therefore zero value in it. The tech can be valuable down the road but that is down the road and only once it becomes commercial and widely accessible and usable and will have nothing to do with its currency. The fact that people think a piece of code somehow becomes worth a fortune because it's shared with everyone else is mind boggling.
As for Wall Street, they did not enter the market to make money by buying and holding. They entered the market for 2 reasons: 1) charge for people to trade it which is their number 1 way of making money and 2) make it volatile and trade the swings and eventually short it to zero.
Nom_de_Guerre
⋅
@newatthis, Haha you really dont understand, its way more than a 'currency' - What is money? You think a limitlessly printed piece of paper called the dollar has value? Why does it have value? Because its backed by the US Marine Corp? Because countries are forced to exchange their currency into US Dollars to buy oil? Why does gold have value? Because its shiny, a pain in the ass to dig out of the ground and easy to shape into jewellery? Do you understand what the blockchain is?
Nom_de_Guerre
⋅
@newatthis, No offense of course but your thinking is flat/2d/in the past, something has value because we decide it has value as a group concensus, your dollar has less than 2% of the purchasing power that it had 100 years ago, they print the crap out of that motherfucker to fund global robberies and mass murders which they call Wars, or havent you noticed ?
newatthis
⋅
@Nom_de_Guerre, Agree that something has value because everyone collectively agrees on that value. USD has value because it facilitates trade (number 1 reason for currency) and US being the world's strongest economy provides the best insurance that it is a viable currency.
Bitcoin cannot be used to facilitate trade therefore it is useless as a currency. Second, nothing stops others from just going to another currency. Third, there is nothing backing it...it is literally 1s and 0s. There is no firewall preventing someone else from creating another currency...and we already have a bunch of them. This is nothing more than a speculative vehicle that will continue to rise as more people jump in, hoping that price will go up. Once the price becomes too large or people start taking out their money, the air will be taken out of the balloon.
At the end of the day, it comes down to this...currency is for facilitating trade, what trade is Bitcoin facilitating? Only speculation. Think of it this...some guy (one who came up with it) is now one of the top billionaires in the world because he created a piece of code that a bunch of people are passing around just to pass around. Yes, makes lots of sense.
Nom_de_Guerre
⋅
@newatthis, Not just a currency or a speculation, its the internet 2.0 and much more, sorry you can't see that, good luck buying in at 25K/50k/250k *)
newatthis
⋅
@Nom_de_Guerre, how can you put 1000s of dollars into something you can't articulate? What does internet 2.0 mean in the context of Bitcoin? What is Bitcoin's thesis? What is the end game? No investment is a sound investment if you cannot articulate its value. 99% of people in Bitcoin have no clue what it is or its value and are only in it to see their balance grow. First sign of a recession (or even before) and this whole thing becomes a bag that a bunch of people will be left holding.