Gold Price Parity Watch

[marcus_of_augustus]

I'll update as/when relevant.

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[cellard]

I'll update as/when relevant.

Good thread. Bitcoin belongs above gold because bitcoin is a better way to store value than a physical piece of metal that is easily confiscable when you need to cross borders.
And this is only one of bitcoin's feature.

I can't believe how insanely underrated bitcoin is only because of that feature. It's like most people's brain still hasn't clicked about that fact.

[brokedummy]

Why does one bitcoin belong above one ounce of gold? Why not a pound of gold? Seems like there are a lot more ounces of gold than there are bitcoins, but I guess gold is way more popular as an investment and also useful for electronics and jewelry.

[ArdiPrabowo]

Why does one bitcoin belong above one ounce of gold? Why not a pound of gold? Seems like there are a lot more ounces of gold than there are bitcoins, but I guess gold is way more popular as an investment and also useful for electronics and jewelry.

if you read and see picture in post op, gold price is above bitcoin price
gold price in over 1200 dollar/ounce and bitcoin price over 1000 dollar/bitcoin

ussualy if dollar value is down , gold price can incraese, and this week dollar price is down price is extrem so, gold price incraese is very high

[NUFCrichard]

Bitcoin belongs above gold because bitcoin is a better way to store value than a physical piece of metal that is easily confiscable when you need to cross borders.

Are you saying that 1 Bitcoin should be worth more than 1 troy ounce of Gold?
That means Bitcoin has to rise by $200 or so, and could happen soon.

It seems very unlikely that Bitcoin will be worth more than Gold though. All the gold in the world is worth about $7 Trillion, Bitcoin is worth $16.5 billion, or $0.0165 trillion, or 0.23% of the value.  I don't think that gap will be bridged any time soon (ever).

[Denker]

Bitcoin belongs above gold because bitcoin is a better way to store value than a physical piece of metal that is easily confiscable when you need to cross borders.

Are you saying that 1 Bitcoin should be worth more than 1 troy ounce of Gold?
That means Bitcoin has to rise by $200 or so, and could happen soon.

It seems very unlikely that Bitcoin will be worth more than Gold though. All the gold in the world is worth about $7 Trillion, Bitcoin is worth $16.5 billion, or $0.0165 trillion, or 0.23% of the value.  I don't think that gap will be bridged any time soon (ever).

I would already be happy when 1-2% of the gold market share moves to Bitcoin!
That could happen in the future in my opinion.
Especially when goverments continue their NIRP shit, ban bigger bills and payments in cash as we see now.Then the next step would be the attempt to forbid certain amount of gold. Try to get that stuff out of the country! Bitcoin would fit perfect here.

[marcus_of_augustus]

Gold might be able to hear bitcoin breathing down it's neck ... making a small run higher it seems.

Bitcoin belongs above gold because bitcoin is a better way to store value than a physical piece of metal that is easily confiscable when you need to cross borders.

Are you saying that 1 Bitcoin should be worth more than 1 troy ounce of Gold?
That means Bitcoin has to rise by $200 or so, and could happen soon.
It seems very unlikely that Bitcoin will be worth more than Gold though. All the gold in the world is worth about $7 Trillion, Bitcoin is worth $16.5 billion, or $0.0165 trillion, or 0.23% of the value.  I don't think that gap will be bridged any time soon (ever).

I would already be happy when 1-2% of the gold market share moves to Bitcoin!
That could happen in the future in my opinion.
Especially when goverments continue their NIRP shit, ban bigger bills and payments in cash as we see now.Then the next step would be the attempt to forbid certain amount of gold. Try to get that stuff out of the country! Bitcoin would fit perfect here.

1 troy Oz of gold is an arbitrary measure, just as much as 1 bitcoin/U$D of 21 million is also, but psychological pricing levels do seem to be important to the great unwashed of the investing masses, so unit pricing needs to be watched for that reason alone ... unless someone feels like re-educating the masses about honest standards, weights, measures and relative vs. absolute scales (via twitter perhaps?  ).

The bigger picture is of course the relative value of total outstanding float of gold (~160k tonnes some say? and on-going mining) versus the known bitcoin float ~18 million and a highly regulated supply. I'll save that total float value thread for another day after this small pricing hurdle is overcome ... currently bitcoin is a tiny fraction of gold needless to say.

[The Sceptical Chymist]

Why does one bitcoin belong above one ounce of gold? Why not a pound of gold? Seems like there are a lot more ounces of gold than there are bitcoins, but I guess gold is way more popular as an investment and also useful for electronics and jewelry.

Exactly, this whole concept is completely arbitrary--and useless.  Gold & silver bugs love to trot out how out of whack the gold:silver ratio is, citing how it's always been 1:16 or whatever.  And there's no basis other than history for why it should be that way.  Same thing with bitcoin:gold or bitcoin:toilet paper.  They're different investments and just because their values happen to intersect...means nothing.

[European Central Bank]

Why does one bitcoin belong above one ounce of gold? Why not a pound of gold? Seems like there are a lot more ounces of gold than there are bitcoins, but I guess gold is way more popular as an investment and also useful for electronics and jewelry.

there are something like 7 billion ounces of gold versus 16 or so million btc. it's genuinely pathetic that people are too stupid to factor this in but there you go. we're stuck with these humans whether we like it or not.

[cellard]

Why does one bitcoin belong above one ounce of gold? Why not a pound of gold? Seems like there are a lot more ounces of gold than there are bitcoins, but I guess gold is way more popular as an investment and also useful for electronics and jewelry.

there are something like 7 billion ounces of gold versus 16 or so million btc. it's genuinely pathetic that people are too stupid to factor this in but there you go. we're stuck with these humans whether we like it or not.

As we are discussing, bitcoin is insanely undervalued, but my fear is that we keep having BUcoin situations where other teams campaign to hard fork. Imagine the fuck up that is going to be if that happens.

The expected long term growth could keep perpetually fucked by the marketcap getting divided every X years because some idiots decide hard forking is a good idea...

[European Central Bank]

As we are discussing, bitcoin is insanely undervalued, but my fear is that we keep having BUcoin situations where other teams campaign to hard fork. Imagine the fuck up that is going to be if that happens.

The expected long term growth could keep perpetually fucked by the marketcap getting divided every X years because some idiots decide hard forking is a good idea...

i don't think a significant long term valuation will be arrived at until the idiots are either silenced or mollified. no serious money would touch it until it looked like things were properly settled. that either happens with genuine compromise, or the idiots get their way and screw up everything but perhaps not quite enough to destroy it completely.

as it stands maybe that day will never come.

[marcus_of_augustus]

Price differential is now convincingly less than $200 ($167 at last check) ...

Also some relevant pearls of wisdom from AlexGR in another thread ...

I like to think parity in terms of ~380 ounces per BTC. That's due to the ratio of 6.1 bn above ground ounces vs 16.15 mn bitcoins mined.

That would require a price of $456k per BTC - but at least the scarcity ratio would be accounted for...

As a side note, the problem with gold spiking upwards is its large marketcap and large annual production levels. At current prices, ~3500 tons of gold per year of new mining output (without factoring recycling) is ~110mn oz. That requires 132bn USD to absorb. A tenfold increase in the price of gold, would suddenly require 1.32 trillion USD per year just to buy annual production. The problem is that there is no such liquidity in the system for allowing this.

On the other hand, silver or bitcoin, can do much larger runs due to their smaller marketcap and much smaller liquidity requirements to buy their annual production.

BTC at 10500$ (10x) would require just 6.9 billion per year to buy the annual production (657k coins x 10.5k usd).
Silver at 170$ (10x) would require 136 billion per year to buy the annual mining output of ~800mn oz.

Gold is priced so high that the numbers involved are too high at 1.32 trillion USD (in a scenario of 10x price) for its 110mn oz. It could happen in a hyperinflation scenario, but then the money one takes wouldn't be worth it anyway. In a sense, gold is constrained from doing a huge run by its large marketcap and the liquidity requirements in the fiat system to sustain prices of 10x+. Silver less so, and bitcoin even less so.

Bitcoin seems to be the best bet in terms of upwards potential because it's so small and its fiat requirements to sustain its rise and mining output absorption are equally small.

and an oldie but goodie webpage, incl. chart on the topic ...

http://pricedingold.com/bitcoin/

[tabnloz]

Totally agree that the parity mark is an important psychological line in the sand.

Most of the older, boomer generation is never going to drop its belief in gold as a store of value. Gold is simple, understandable and part of their belief system and common lexicon. Boomers love the hold it / own it, tangibility of gold. I also don't think that gold will lose its place in the foreseeable future, at least for another generation. Gold bugs will always claim 'Hacking', 'Digital' etc

But, I'm in between generations. I grew up with the net and the ability to transfer data seamlessly and without a third party is revolutionary for not only the internet age (where you can be online 24hrs a day but banks are still 9-5) but also for the current economic times. We're heading towards digital NIRP, albeit in slow motion, like the proverbial frog in the boiler.

Passing and holding above parity will be a important marker for bitcoin especially as lately bitcoin and gold have reactd relatively similarly to global events.

[U2]

Why does one bitcoin belong above one ounce of gold? Why not a pound of gold? Seems like there are a lot more ounces of gold than there are bitcoins, but I guess gold is way more popular as an investment and also useful for electronics and jewelry.

if you read and see picture in post op, gold price is above bitcoin price
gold price in over 1200 dollar/ounce and bitcoin price over 1000 dollar/bitcoin

ussualy if dollar value is down , gold price can incraese, and this week dollar price is down price is extrem so, gold price incraese is very high

Those are arbitrary numbers though. An ounce is some random amount like 28 or 30g right? It's a useless figure so comparing the prices of gold vs usd and bitcoin vs usd is useless. What's more important is the market cap and the total supply.

[notme]

Why does one bitcoin belong above one ounce of gold? Why not a pound of gold? Seems like there are a lot more ounces of gold than there are bitcoins, but I guess gold is way more popular as an investment and also useful for electronics and jewelry.

if you read and see picture in post op, gold price is above bitcoin price
gold price in over 1200 dollar/ounce and bitcoin price over 1000 dollar/bitcoin

ussualy if dollar value is down , gold price can incraese, and this week dollar price is down price is extrem so, gold price incraese is very high

Those are arbitrary numbers though. An ounce is some random amount like 28 or 30g right? It's a useless figure so comparing the prices of gold vs usd and bitcoin vs usd is useless. What's more important is the market cap and the total supply.

Gold is priced in troy ounces.  1 troy ounce = 31.1035g.

[marcus_of_augustus]

Why does one bitcoin belong above one ounce of gold? Why not a pound of gold? Seems like there are a lot more ounces of gold than there are bitcoins, but I guess gold is way more popular as an investment and also useful for electronics and jewelry.

if you read and see picture in post op, gold price is above bitcoin price
gold price in over 1200 dollar/ounce and bitcoin price over 1000 dollar/bitcoin

ussualy if dollar value is down , gold price can incraese, and this week dollar price is down price is extrem so, gold price incraese is very high

Those are arbitrary numbers though. An ounce is some random amount like 28 or 30g right? It's a useless figure so comparing the prices of gold vs usd and bitcoin vs usd is useless. What's more important is the market cap and the total supply.

I completely agree that those numbers are arbitrary however they are not totally useless though. It is true that what is more important is market cap (i.e. total float in circulation) but for pricing valuations psychology of crowds is a very powerful thing. In fact it is this effect that Central Banks use to artificially maintain values while they are inflating monetary supplies. For example, do you know how many US$ there are in circulation? Do you care? How many people save in some fiat currency that they have no idea how many units are in circulation or how many are being printed? What is important in day to day life is the psychology of pricing, if you can spend $5 to buy a beer you implicitly agree that your unit is worth $5 regardless how many dollar units the Fed. Res. made available to their banker buddies for the latest bailouts from bad trading bets.

Essentially that's why 1 troy oz and 1 btc or 1 millbtc are important psychological levels to watch. Humans are not rational, crowds of humans even less so. Eventually the total supply and demand will be felt by the market doing it's thing and the irrational trades lose vale ... you can bank on it, like clockwork.

[NUFCrichard]

Strangely even though it is completely arbitrary, it almost seems like gold parity has been some sort of price cap in the past bubbles.
In 2013 we almost reached parity (i think Gox managed it, but that doesn't count). In 2017 we were withing a few dollars, but again, just as parity seemed assured, pop went the bubble.

Maybe people are waiting to swap their Bitcoin 1:1 for gold ounces (I would swap a few), but people are beating them to it with a few dollars to go, or maybe it is just a coincidence.  We will see next time, hopefully at about $1800

[Raimonn]

Gold parity its only a psychological mark, but could be important as you can see that every time that bitcoin price is near the gold/ounce price, there is anyone that makes announces (Bank of China) to make bitcoin price fall.

[aardvark15]

I would expect that when the price of stocks drops, the price of gold and Bitcoin would rise. However, If Bitcoins continues to succeed, it will have more growth than gold since gold does not have a set limit to how much we can mine in the same way that Bitcoin does.

[cellard]

I would expect that when the price of stocks drops, the price of gold and Bitcoin would rise. However, If Bitcoins continues to succeed, it will have more growth than gold since gold does not have a set limit to how much we can mine in the same way that Bitcoin does.

The performance of bitcoin cannot be compared to anything else in the planet, it is really its own thing, that's why it's so unpredictable, but at the same time it makes it so attractive.

You cannot have a real, out-of-the-system asset and try to predict it, it does it's own thing, so all we can do is keep making the software better and things will turn out great for us.