Are gold and bitcoin coupled?

[bootlace]

I'm curious to know whether gold and bitcoin price are subject to rise in the same direction. Basic thinking suggests yes, because both are bets against the fiat currency system. However, since there is so much overlap between users of gold and bitcoin, I wonder if for example a sudden rise in gold would lead Bitcoiners to sell and take positions in gold instead, pushing the bitcoin price down? I believe that once Bitcoin establishes its position as a means of exchange, rather than its predominant current use as store of value then this won't be a concern any more. Any thoughts on this matter?

[samurai1200]

Adoption of Bitcoin as a store of wealth, when compared to gold used for the same purpose, approaches zero. So I wouldn't say they are coupled so much as they serve a similar purpose. If people are looking to 'get out of' the Dollar/Euro/Pound/Yen, they'll move to an asset with better stability and/or growth.

[JackH]

Yet Bitcoin can do things Gold cannot. It can be send instantly across the world, it can be stored safer than Gold (by individuals) and there is not an unlimited supply of it. I see this as Gold v2.0

[BitcoinAshley]

Yet Bitcoin can do things Gold cannot. It can be send instantly across the world, it can be stored safer than Gold (by individuals) and there is not an unlimited supply of it. I see this as Gold v2.0

Gold can still do a few things bitcoin cannot. It can be traded in person, anytime, anywhere, without electronics, during an EMP strike, during an internet outage, during a power outage, during a zombie apocalypse. It is a little easier to verify a gold coin than a casascius coin (you can't bite on, weigh & measure a casascius to determine whether its private key is valid.)

Note that I totally agree that bitcoin is better than gold in too many ways to count and is the "currency of the future blah blah blah" etc etc. But let's not forget that gold is gold and bitcoin is bitcoin.

As for whether they are coupled - physical gold price is currently coupled to paper gold price, and both are being manipulated. There are oodles of manipulation in the world of PMs. PMs will stop being manipulated well after the Bitcoin train has left the station, and by then, they might only be used in appalachian backwater regions by people who shun technology, or kept as a store of value.

I see all these ridiculous arguments in gold threads here "in a zombie apocalypse, weapons and potable water is more valuable than gold." Let me just point to the numerous examples of countries whose citizens have started using gold & silver - not primarily, but still a use case - during times of hyperinflation and other crises. Please get it into y'alls head that your "zombie apocalypse" is not the only disaster scenario that could ever possibly happen in all of time. In this bizarro-world of the bitcoin-fanboi/gold-h8r, everything is either (1) peachy clean and every single person on the earth has a computer with bitcoind running, or (2) zombie apocalypse where no currency matters, you just need guns and rice and water to survive.
Guess what? We're in between those two scenarios right now... and probably will be forever. So, gold is gold and bitcoin is bitcoin.

[Elwar]

I see Bitcoin as a commodity IPO.

Think of Gold as Microsoft and Bitcoin as Google in the late 90s.  Whereas Microsoft has pretty much reached its investment plateau and will rise and fall with technology changes, early Google was still small and had a lot of room to grow. Now Google and Microsoft are more closely coupled as far as tech companies go.


Bitcoin and gold will rise and fall as a commodity based upon world events and the devaluation of fiat currencies. But Bitcoin is still relatively unknown and has a lot of technology going into it to make it better. On that side of it, the price grows rapidly as would an early tech stock.

Once Bitcoin has the reach and availability that gold currently has, it will more closely rise and fall with respect to fiat's fall and rise.

But they will always have their own gains and losses based upon specific aspects of their own technology. A new gold mine discovered, a fad of wearing more gold in one country, adoption as a currency, etc. While Bitcoin could have major wallets hacked, exchanges regulated, mining hardware changes.

Gold is not always coupled with silver for the very reason that they are two different metals with different uses and mines. But to the extent that they react to the fiat currencies, they should have similar reactions.

[Melbustus]

My thoughts are that bitcoin will outperform gold significantly for a while. If bitcoin gets to a stable market-cap, then yeah, they'll probably be coupled for a while. But if bitcoin remains successful, it'll suck marketcap from gold long term (as in, over a generation or three):

Posted about this in Cypher's gold thread a few days ago: https://bitcointalk.org/index.php?topic=68655.msg1651425#msg1651425

And here's Cypher's excellent article/post on the topic from a year ago: http://web.archive.org/web/20120403154846/http://bitcoinmedia.com/bitcoin-vs-metals

[notme]

no

[samurai1200]

no

win

[Sage]

Gold has thousands of years price history, and mass adoption.

Bitcoin is still in beta, and pretty much non-exist adoption compared to gold.

Those 2 fundamentals prevent them from being linked.

No, they are not coupled.

[Spaceman_Spiff]

I'm curious to know whether gold and bitcoin price are subject to rise in the same direction. Basic thinking suggests yes, because both are bets against the fiat currency system. However, since there is so much overlap between users of gold and bitcoin, I wonder if for example a sudden rise in gold would lead Bitcoiners to sell and take positions in gold instead, pushing the bitcoin price down? I believe that once Bitcoin establishes its position as a means of exchange, rather than its predominant current use as store of value then this won't be a concern any more. Any thoughts on this matter?

I think gold and bitcoin have an overlap in function (undilutable money), and thus an partial overlap in target group (people interested in undilutable money).
The amount of money this target group has will be divided over bitcoin and precious metals (silver too), so yes, increased adoption of 1 will lead to removal of funds from the other, think communicating vessels.  I would think that absent bitcoin crashing or other bad news, it will be bitcoin that takes more market share however, not gold.

The second thing to consider is whether the amount of people interested in undilutable money, and the % of their wealth that they want in undilutable money will increase or decrease.  In other words: how big will the pie become that bitcoin and gold share?  My money is on the pie getting a whole lot bigger.

[gradient vector]

Can't really say that they're coupled. Many gold bugs don't understand even ridicule bitcoin. Two totally different user/investor classes (for the current moment at least).

[benjamindees]

I started out believing that gold and Bitcoin are complementary.  Silver competes with both, to an extent.  But lately I've been considering the idea that Bitcoin can completely replace gold.  Most gold investors don't really have any idea about its "intrinsic value".  It's just a convenient standard for hard-money adherents.  What happens when the first ones flinch, and make a break for Bitcoin instead?  They may not be so coupled after all.

[the founder]

http://www.ounce.me started off measuring Gold , Silver and other Precious Metals.   I added Bitcoin to that list because I felt that Bitcoins belong in the same area... all have limited supply and are used as a store of wealth.

They are not coupled (in value) now because bitcoin is still being adopted (Gold has a 10,000 year head start).

However eventually you'll see them taking cues from each other (gold goes up, bitcoin goes up,  Gold goes down Bitcoin Goes down).

But that's not going to happen until the adoption rate reaches a decent adoption rate...    until then Bitcoin will most likely go on it's own..

[Spaceman_Spiff]

Can't really say that they're coupled. Many gold bugs don't understand even ridicule bitcoin. Two totally different user/investor classes (for the current moment at least).

There are a lot of people here that also like precious metals, myself included.  Needless to say, there are  bitcoin people who don't like pms, and gold- and silverbugs that don't like bitcoin.  However, I would bet that the % of bitcoiners that like PMs is larger than the average % of the population that likes PMs, and vice versa.

[jago25_98]

Gold is mentioned in religious texts.
Bitcoin is more useful.

They have both echoed each other at points, that's what the OP is getting at

[AnonyMint]

I see Bitcoin as a commodity IPO.

I see gold as a private hedge against govt malfeasance, and Bitcoin as a diabolical public IPO for carterlization of all commerce on earth (it can't be fixed in Bitcoin unfortunately):

Bitcoin: The Digital Kill Switch

https://bitcointalk.org/index.php?topic=160612.0

5 key differences between gold and bitcoin:

Force be also with you Obe Wan.

Be me not to fail that remind Obe Wan, individually held PHYSICAL gold & silver be still very important for STABILITY of the force:

https://bitcointalk.org/index.php?topic=160612.msg1702981#msg1702981

Teach you did the balance Yoda.