As I've come across a lot of people saying that Bitcoin is a bubble and I've seen the infamous tulip argument I decided to do more research into prices in Bitcoin and I also decided to have a closer look at Gold/Silver because I really should be keeping a closer eye on those things because of my work as a Jeweller anyway. It's something that's actually really, really obvious but I'm surprised more people haven't picked up on it, either that, or they choose not to or there hasn't been enough data around for people to get a clear picture.
I'm always looking to diversify so when I saw AU trading posted up
http://autrading.co.uk/home.php I was jumping for joy because I could directly buy shiny Gold/Silver with Bitcoin rather than go through all the hassle of selling the coins on an exchange which means it would probably also be easier to cash out in paper if I ever needed to.
Here's the interesting part, check out the prices of an ounce of Gold/Silver:
Gold: 1.22BTC
Silver: 0.02BTC
Now I can tell you I've been keeping a closer eye on this and I think the most I may have seen gold and silver budge is to 1.44BTC - 0.04BTC ( I'm going purely by memory here so it isn't going to be accurate ) but the prices have immediately stuck to these levels again, they also don't seem to be going any lower. Now when you compare this to the crazy volatility in the BTC/USD exchange rate it just seems like the prices are bumping up and down slightly.
So what does this tell us? As I've always advocated I have never though that Bitcoin is the problem, I don't even think it is actually worth that much as shown in comparison to Gold/Silver because otherwise you would have the same stupid price spikes that you have in paper money in Gold. The problem to me seems to be that we're so used to measuring things in paper money that there are people out there who can't comprehend that there's an alternative out there to Gold/Silver that could maybe actually work just being a currency because people have only ever seen Gold/Silver as 'the' alternative.
I truly believe that what will happen soon is that paper money will become that hyperinflated ( my personal price barrier was the $1000 mark and I'm surprised it was breached so easily ) that you'll have the same problem the Weimar Republic and Zimbabwe faced and Bitcoin will be worth something stupid like $1,000,000 per coin and you'll have to purchase bread with a bloody wheelbarrow if you still want to live by the rules of the current government in your country.
I seriously think we need to be gathering much more data on the Bitcoin price of precious metals so we can investigate this further because I think I'm onto something here, people are far too focused on the dollar thinking it's worth something because they've had it beaten into them at an early age that it is, I remember hearing somewhere on the news ( totally forgotten where, might have been CNBC or Russia Today ) that Bitcoin has now reached the same sort of value that gold has, I think it may actually stay up there with it, then they'll either rise together or spike up with each other.
