Sell Gold: Buy Bitcoin?
The financial markets news story of the week most definitely has to be Bitcoin. The price has gone parabolic in the past few trading days, hitting daily all time highs, with some “analysts” now “forecasting” a 2030 price of $500,000 per coin for infamous crypto-currency.
Not surprisingly, given the media attention it is generating, interest in investing in it is skyrocketing, with investors dumping other assets to chase the momentum in BTC.
This includes precious metal investors, with more than a little anecdotal evidence that gold and silver bulls have switched their portfolios to a crypto-currency that has been cleverly marketed as “gold 2.0” and “digital gold” since its inception. Turns out some people prefer the hare to the tortoise.
At this point, whilst we think the price of BTC is screaming “bubble”, only a fool could deny that it, and a range of other cyrptos like Ethereum, are potentially lucrative speculations.
More broadly we are a believer in Blockchain technology, and given the efficiencies it offers, think it will provide no end of disruption for banking and financial services in the years ahead.
I was reminded of this personally just yesterday when i was charged what sure did feel like an egregious spread from the good people at Paypal (thanks Elon and Peter) when buying some clothes online from the United States.
But a more efficient payment mechanism for transferring money does not make the technology money itself, and its for this reason, we are sceptical that Bitcoin really is “gold 2.0”, despite its creators doing its best to make it “look” like gold (see google image of Bitcoin below)
You can access a more detailed read on gold, bitcoin, the blockchain and just what does represent "money" in an era of QE and NIRP via the ABC Bullion website here
Gold bull since early 2000. Have spent +20yrs working in investment analytics, research & portfolio construction. Author of two books on investing in gold and the causes of the GFC. Lover of markets, competition & technology