2021-4-9 Bloomberg - Bitcoin is displacing gold as an inflation hedge

[Karartma1]

How to explain bitcoin? As I said a couple of weeks ago, it’s hard to dismiss the digital currency as a classic investment bubble because — unlike any of the other historical manias which have seen similarly extreme gains in price — it has formed a series of bubbles, which have burst and then reinflated. Bubbles aren’t supposed to do this: They are booms grown so large that they cannot gently deflate and must burst, never to return.

Bitcoin has many of the symptoms of a speculative mania, led by the sheer excitement it inspires in its believers. But it’s hard to say what the digital asset’s value should be. Like gold, value is in the eye of the beholder. It has no intrinsic value, and while the same is true of banknotes, it has no government standing behind it.

bloomberg.com/opinion/articles/2021-04-09/bitcoin-is-displacing-gold-as-an-inflation-hedge

Very interesting article IMHO. Bitcoin's performance over the last year is directly aligned with movements in bond yields where whe these last ones rise, so does bitcoin, implying that BTC benefits directly form the "reflation trade" or the belief that inflation is actually coming.

[Theb]

I'm surprised that even Bloomberg is writing articles related to Bitcoin vs. Gold and not it's about their hedge against inflation which I think they went too far. My point of view regarding this matter is you can never really compare Bitcoin against Gold as they are completely different types of assets, Gold being a more stable asset while Bitcoin on the other hand is more volatile in nature making it a risky asset to be holding as a hedge against inflation. Inflation hedge assets in the first place are only about investments and I don't think Bitcoin has fit into that criteria, yes I know we have hodlers but they more likely fit in to a long-term speculative play rather than an investment.

[willoweb]

With such a growth dynamics in the price of bitcoin, in general, everything can crowd out. But smart and forward-thinking wise investors will never invest in one asset, no matter how attractive it looks. If we are talking specifically about protecting against inflation, that is, preserving the value of assets, then diversification is the most correct way. 33% gold + 33% USA dollar and euro for example + 34% bitcoin and other cryptocurrencies. Here's the easiest way to save your savings from inflation. I have been doing this for a long time and have never regretted it.

[Kakmakr]

I really do not know if you could even compare Gold with Bitcoin when it comes to being an inflation killer. Depending when you bought your first bitcoins, you would have killed inflation with one "Boom" in the price. Take myself as an example, I bought bitcoins at $300+ and look where the price is now. ( I sold some at $18 000 in 2017 and my profit was amazing... so my investment .....destroyed the impact of inflation for many years.)  

I recently also sold a coin or two at $59 000 ..... and I doubt if any investment in Gold, would have beaten my profits in the long-term. (timing is of utmost importance to maximize your profits)  

[Lucius]

Not that the article is generally bad, but that obsession with gold/silver in relation to Bitcoin has already become a bit irritating, especially if someone analyzes the gold/silver ratio in the past 300 years and everything that happened in that period - trying to find out what it can mean for Bitcoin that is barely over 10 years old. There is a lot of speculation, but the main problem of all journalists who deal with cryptocurrencies is that they really have nothing to catch when looking for facts to justify their assumptions.

The author of this article also has basic problems with searching the Internet, because there are so many songs dedicated to Bitcoin - and he is obviously not aware of that.

As far as I'm aware, nobody has written any songs about bitcoin yet. Please fill this gap in my knowledge if you know of one.

Here's something for you Johnny -> All About That Bitcoin - by Naomi van der Velde + Lovesong for Satoshi Nakamoto Bitcoin Whitepaper

[Karartma1]

Not that the article is generally bad, but that obsession with gold/silver in relation to Bitcoin has already become a bit irritating, especially if someone analyzes the gold/silver ratio in the past 300 years and everything that happened in that period - trying to find out what it can mean for Bitcoin that is barely over 10 years old. There is a lot of speculation, but the main problem of all journalists who deal with cryptocurrencies is that they really have nothing to catch when looking for facts to justify their assumptions.

The author of this article also has basic problems with searching the Internet, because there are so many songs dedicated to Bitcoin - and he is obviously not aware of that.

As far as I'm aware, nobody has written any songs about bitcoin yet. Please fill this gap in my knowledge if you know of one.

Here's something for you Johnny -> All About That Bitcoin - by Naomi van der Velde + Lovesong for Satoshi Nakamoto Bitcoin Whitepaper

I hope he will read you and to go listen those songs 
On gold, I wouldn't be so strict since we all know that bitcoin can be considered a digital form of gold. They share many characteristics with the main difference being the fact that with bitcoin you can carry as many of them as you want. With gold, well, that's tricky.

[Lucius]

I hope he will read you and to go listen those songs 

I sincerely doubt it, because when a man writes about some serious things, he should at least be able to be intelligent enough to use search engines or visit YT. Yet I don’t think he meant literally that no one wrote a song about Bitcoin, but that it wasn’t done by one of the famous singers, or at least known to him.

On gold, I wouldn't be so strict since we all know that bitcoin can be considered a digital form of gold. They share many characteristics with the main difference being the fact that with bitcoin you can carry as many of them as you want. With gold, well, that's tricky.

There are already countless discussions about everything that is and is not common to gold, silver and Bitcoin - but I personally think that they have very little in common. First of all, Bitcoin has a max supply which makes it very attractive to invest because we all know in advance what will happen in this regard in the next 100 years. On the other hand, no one can say with certainty how much gold has been mined so far and how much is still there on planet Earth, and how much is there anywhere else in space.

If the plans to start commercial mining of gold and other minerals/metals from asteroids in the next 50 years really come true, what will happen to the price of gold?

[Streets 2.0]

I have thoughts on this topic with gold - if bitcoin gets worldwide approval from governments, then it will simply be included in some part of the state reserves or will be used as a stabilizing factor against inflation - after all, no one prints it as a dollar or euro ... Therefore, in the coming years, bitcoin may become part of the financial policies of states that recognize it as legal on their territory. But this will not be the case everywhere, each country will decide this issue separately.

[Karartma1]

I hope he will read you and to go listen those songs 

I sincerely doubt it, because when a man writes about some serious things, he should at least be able to be intelligent enough to use search engines or visit YT. Yet I don’t think he meant literally that no one wrote a song about Bitcoin, but that it wasn’t done by one of the famous singers, or at least known to him.

On gold, I wouldn't be so strict since we all know that bitcoin can be considered a digital form of gold. They share many characteristics with the main difference being the fact that with bitcoin you can carry as many of them as you want. With gold, well, that's tricky.

There are already countless discussions about everything that is and is not common to gold, silver and Bitcoin - but I personally think that they have very little in common. First of all, Bitcoin has a max supply which makes it very attractive to invest because we all know in advance what will happen in this regard in the next 100 years. On the other hand, no one can say with certainty how much gold has been mined so far and how much is still there on planet Earth, and how much is there anywhere else in space.

If the plans to start commercial mining of gold and other minerals/metals from asteroids in the next 50 years really come true, what will happen to the price of gold?

I know what you mean and given the current economic chaos started by the pandemic I'd have imagined a gold price of 3 to 5K (and that never happened). Of course a space gold rush, which looks quite near, would change everything.
Therefore, on that specific part, bitcoin is not affected!

[willoweb]

The rise in the price of bitcoin and other individual alternative cryptocurrencies that he pulled up with him is hundreds of percent such income will not be given by any bank with its deposits, unless it is a financial pyramid. And the cryptocurrency market is not a pyramid! So more and more people are beginning to count simple numbers on their calculators and understand what's what. And then we will see a gradual outflow of capital from classical banks - in favor of the cryptocurrency. Everyone wants to catch this train.