Bitcoin and gold price inflation adjusting all-time-high

[jaysabi]

Gold is decoupling from bitcoin price rise and is actually doing worse than BTC for the first time since it's inception.

This happens every time Bitcoin goes on a crazy upward streak. In any short term period, you can find plenty of instances where this happens but if you zoom out you will probably find the trend largely remains intact. It's because gold is not as volatile and there's a lot more of it, and it's just not nearly the speculative vehicle Bitcoin is. It's a lot easier to move something with a significantly smaller market cap, as Bitcoin has compared to gold. As always, when you start and stop the data collection and comparison will materially affect the conclusion.

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[MCobian]

Based on the explanation in the opening post, it means Bitcoin and Gold have not returned to the all time high price,
because we forget that the US Dollar used to display the value of Bitcoin and Gold has inflation. So because the inflation
against the US Dollar displayed now is not the real value of Bitcoin and Gold, this is very interesting. Because I also just
realized it after reading the explanation in the opening post, meaning Bitcoin will need to reach a price of $ 21,131 to return
to its true real value.

[magneto]

We should be able to differentiate between all-time-high in price of assets which is usually in US dollar and the real all-time-high in value. Gold was able to reach all-time-high in price if compared to UD dollar this year, but in real value, gold has not reached all-time-high since 1980. While bitcoin in just three years reached all-time-high today in price in US dollar but not yet reached all-time-high in real value as it needs to get to a price of $21,131.02 as a result of US dollar inflation too, but very possible this will only be achievable in just less than three years.

Certainly. And this is the fallacy that a lot of investors tend to fall prey to.

Gold bugs such as Schiff seem to believe that no matter what your point of entry is, as long as you get your hands on gold, you are guaranteed a long term profit. This is completely untrue given the fact that gold has not outperformed the CPI over the past 5 decades even when its current price is at an all time high.

A similar logic should be applied to BTC if you are a truly 'intelligent investor' (quoting Ben Graham here). Even though BTC is a good store of value in the long run, there are no guarantees that it will be if you buy at peaks and sell at lows. Even if BTC markets go up long term, if you engage in that type of counterproductive trading, you could lose money on your position even if the wider market make sizable gains.

And don't think that just because inflation is low these days, it can be ignored. History has shown that future inflation is more likely to be mean-reverting, not to be extrapolated from the past.

[jaysabi]

Hence I think when you calculate your profits with inflation you are doing something wrong, because normally your money doesn't gain anything when it stands there idle, which means no matter how much you can gain, it is better.

The point isn't to calculate profits with inflation, it's to strip out the price appreciation attributable to the depreciation of the dollar so that you're comparing actual investment returns based on the purchase price of the asset vs. when you first invested.  If bitcoin is worth $10k when you buy it but $50k when you sell it but the cost of everything denominated in dollars is 5x more expensive too, you haven't actually gained any additional purchasing power.

Also, nobody holds significant amounts of cash for significant amounts of time, so the inflation concern of the USD is overblown. Nobody suffers near the inflation rate that's constantly quoted because any significant wealth is constantly invested and not kept in cash.

[Salauddin1994]

If bitcoin and gold prices rise it will have an effect on gold and not on bitcoin when the dollar weakens gold imports become more expensive more dollars have to be paid for importing goods and services besides bullion dealers the government also has to pay more for gold. The strengthening of the dollar means a decline in the price of gold the depreciation of the us dollar also hints at inflation it is the tendency of the common man to build gold as a safe haven when paper money is under threat the rise in inflation is good for gold prices and the price of inflation controlled gold can become extremely positive if confidence in the economy is completely eroded.

[crypticj]

If we will break 20k then we will break 21k too for sure. However, it may be harder than looks like

[Findingnemo]

Based on the explanation in the opening post, it means Bitcoin and Gold have not returned to the all time high price,
because we forget that the US Dollar used to display the value of Bitcoin and Gold has inflation. So because the inflation
against the US Dollar displayed now is not the real value of Bitcoin and Gold, this is very interesting. Because I also just
realized it after reading the explanation in the opening post, meaning Bitcoin will need to reach a price of $ 21,131 to return
to its true real value.

All time high should never be used to measure the growth because it will help the prices to dump more once it reaches new all time high. Well it looks interesting read though which maybe helpful for budding investors to know the importance of investing their money because it depreciate its value day by day.

[vaultman]

Interesting article. Many people say that gold is constantly increasing in value, but few people take inflation into account. Indeed, if we take into account inflation, it turns out that the price of gold has not increased much. In general, I am not a fan of stock markets, cryptocurrencies are more interesting for me in this regard. On the stock exchange, a 10% increase in price is already a big indicator of price growth, while cryptocurrencies can rise in price much more, which is more attractive for short-term investors.

[KingsGambet19]

Gold is always or constantly getting expensive over a period of time but bitcoin is different because it can move faster and can dump too faster depending on the demand from the bitcoin users. However, I can compare that bitcoin is more like gold in some other way due to the fsct that both assets now are in bullish trend. Well, I wish both asset will be gone good especially bitcoin for where most of us here in the forum wanted too. The higher the market of bitcoin will get the higher profit also bitcoiners will get.

[FanEagle]

Inflation is not your enemy, it is not your friend neither, it is the nature of the current financial system that we can't imitate away from, it is not something nice, neither something hurtful neither when you can actually use it properly.

When you have 2% or under inflation (not negative) you are growing and when you grow everything grows for your nation as well, but when you have 500%+ inflation like some destroyed nations, that is going to have irreversible affects, for a long time at least.

However, even with the 2% and under we need to reconsider what we are talking about with the inflation, sometimes nations calculate it based on things that are not basic needs, if that is the case for house, car (or transportation in general) food, bills and so forth, that would mean that we are doing fine, but sometimes they consider it based on tennis balls and bike prices and carpet prices, which shows good inflation where in fact it is not at all.

[arwin100]

Gold is always or constantly getting expensive over a period of time but bitcoin is different because it can move faster and can dump too faster depending on the demand from the bitcoin users. However, I can compare that bitcoin is more like gold in some other way due to the fsct that both assets now are in bullish trend. Well, I wish both asset will be gone good especially bitcoin for where most of us here in the forum wanted too. The higher the market of bitcoin will get the higher profit also bitcoiners will get.

Comparison has been made due to the efficiency for long term investment but the different between those both asset is bitcoin is unstable which can move more faster and the gold got   quite low movement, for now  many prefer bitcoins due  to profitability and the current state on the market but I think it cannot defeat the stand of gold since this is more secure and easy to understand by people.

[BTCappu]

Your last paragraph is what I didn’t get you said that gold has reached its all time high in the US dollars but that its real value has not reached an all time high. I didn’t get that last paragraph, so if it’s not the US dollars what then is the real value of gold calculated by? EUR or something else that is not really a currency?

I don’t know for you, but as for me, whatever value you’re seeing them in the USD, that’s their value. Bitcoin reached all-time high, and it did for real. What you’re seeing there is the real value, if it’s not then I don’t know what’s the real value for you