If Bitcoin Becomes the Global Reserve, What Happens to Gold?

[kanftka]

I was reading through older topics when I found this post by ''Icy-'' Posted: June 24, 2011, 12:32:45 AM



https://bitcointalk.org/index.php?topic=21702.msg272976#msg272976

Then I asked my self: What if one day, the world wakes up and Bitcoin is not just an asset anymore but the global reserve currency?
Not just some side thing to hold, but the real deal, the main way countries keep their value, pay off debts, and even do business with each other.

Imagine oil priced in sats lol. Like for real, the oil that is been priced in dollars forever suddenly has a new way. You see world leaders shaking hands, making deals, and maybe instead of saying dollars or euros, they say Bitcoin... We want 15 million barrels, pay us in Bitcoin.. Just like that..

Imagine global trade settled in BTC.
Not just tech guys or bitcoin guys. I mean governments, big banks moving huge amounts of money across borders without waiting days or messing with confusing exchange rates. It is fast, clean and straight up. BTC from one safe wallet to another. Whole countries doing business with just a number and trust in a system no one controls alone.

Also imagine central banks stacking sats instead of bars. lol
Yeah, those giant gold vaults we see in movies.. I am sure they are still there, but what if they don’t hold the real power anymore. The real treasure will lives on hard drives, in cold storage, locked with keys no one just walks in and steals. what if central banks quietly drops gold, making space for Bitcoin in their reserves, maybe even ditching gold completely.

In that kind of world… what happens to gold?

Fr. What will happen to that shiny rock we dug up for thousands of years, fought wars over, passed down as family treasure, locked away for safety? will it just sit there? will it still mean the same?

[Free Market Capitalist]

Fr. What will happen to that shiny rock we dug up for thousands of years, fought wars over, passed down as family treasure, locked away for safety? will it just sit there? will it still mean the same?

That's not going to happen overnight. We live in a world that has shifted and continues to shift from physical to digital, and therefore it is logical to think that at least a large part of the gold market will be eaten up by bitcoin. But there are functions of gold that cannot be replaced by bitcoin, such as jewelry or industrial uses.

For me, gold would likely lose some financial demand but still remain valuable due to its long history of trust.
Unlike Bitcoin, gold is physical and doesn't rely on technology, so it would still be used as a backup store of value. Central banks and individuals might continue holding gold as a hedge or safety asset.
While Bitocin could dominate digital finance, gold would likely remain important in a smaller, more specialized role. It's still very early to say such things.

Probably but technological revolutions happen in the blink of an eye. Maps also had thousands of years of history and today nobody uses a paper map. The change from physical to digital happened in a decade or so.

Without being able to say anything for sure, my opinion is that the market cap of bitcoin will surpass that of gold in a relatively short period of time, perhaps in the next 10 years, and that there will be a market for gold because of what you say and what I said before, but who knows. The future usually brings unexpected events.

[Webetcoins]

I am not expecting all central banks will adapt bitcoin hence gold will survive along with bitcoin as a reserve. Does any government policy have a mandate about having only one asset as a reserve? When no such regulations for most governments, I guess gold will co-exist if bitcoin become a global reserve.

Bitcoin got less hassles compared to gold hence governments may start considering it and at the same time gold will not see any immediate problem because of entry of bitcoin as a reserve.

[alani123]

Compared to the wealth that has been created, gold reserves held by central banks is peanuts.

If you go to India, a gypsy family, Anatolia turks, Syrian, Lebanese cultures etc. now THIS is where gold reserves are actually used. A family getting their daughter married will invest substantial amounts of their wealth into gold. For them it's no joke. But when a central bank holds like 3% of the GDP in gold, it's nothing. It can't save the economy from a crisis and even with exmples of recent history, gold reserves have failed to get countries out of sticky situations. Look at Lebanon and Turkey.

The only way to get an economy out of a sticky situation and keep going is a continuous supply of something valuable. See Russia and gas. Iran and petrol + Uranium etc. These countries can be cocky in the international arena and at the same time save their economy from total collapse because they get a constant stream of income from their natural reserves.

[Kagaru]

Frankly, it is not out of the realm of possibility how things are currently developing. Provided that Bitcoin ever becomes the reserve currency across the globe, it would turn the whole financial world upside down. I believe that even gold would not be valuable anymore, perhaps just a historic or symbolic property but much of its ability to control money in its current form would be lost. Gold has the trust of people due to its past history, however, in case governments and large institutions begin to take Bitcoin as the real money to save their money, the focus will transfer firmly. I can just imagine that something entirely digital can substitute something we have preserved since the time immemorial, but this is actually a bit the way the world is moving at.

[Iranus]

Compared to the wealth that has been created, gold reserves held by central banks is peanuts.

If you go to India, a gypsy family, Anatolia turks, Syrian, Lebanese cultures etc. now THIS is where gold reserves are actually used. A family getting their daughter married will invest substantial amounts of their wealth into gold. For them it's no joke. But when a central bank holds like 3% of the GDP in gold, it's nothing. It can't save the economy from a crisis and even with exmples of recent history, gold reserves have failed to get countries out of sticky situations. Look at Lebanon and Turkey.

The only way to get an economy out of a sticky situation and keep going is a continuous supply of something valuable. See Russia and gas. Iran and petrol + Uranium etc. These countries can be cocky in the international arena and at the same time save their economy from total collapse because they get a constant stream of income from their natural reserves.

You are right in saying that the people are the ones who hold the most gold. According to the World Gold Council, about 50% of all gold (about 95,000 tonnes) is used for jewelry and is owned by people in many different countries. But central banks are also big holders, they are not as small as you say. By 2024, central banks will hold about 20% of all mined gold (about 37 thousand tons).

The purpose of countries holding gold is to protect the economy, prevent risks due to economic crisis, natural disasters, war or geopolitics...And whether gold can save the economy in times of crisis depends on the government's economic and monetary policy, gold cannot guarantee anything.

https://investingnews.com/daily/resource-investing/precious-metals-investing/gold-investing/top-central-bank-gold-holdings/

[Lucius]

I don't see how any of the powerful (big) countries in the world will move away from gold and favor something that is decentralized and over which they have no control (for now)? Even if this were to happen by some miracle, there should be no doubt that all these countries would want to change BTC in the way that suits them better, and that there would probably be a lot of forks and chaos due to hacking and the possible loss of private keys.

I think that gold will remain what it is today for a long time to come, although it may one day be replaced by something else, not necessarily Bitcoin. Humans will inevitably evolve and at some point may reach a level where material things will no longer be as important as they are today - of course, if they don't completely destroy themselves before then.

[Ruttoshi]

This is a big dream for bitcoin. I can't imagine that these big countries will use bitcoin the way that you wrote it in the OP, because bitcoin is beyond c
institutional control, decentralized and wasn't created by any government. I believe that the highest thing the countries government will do is to use it as a strategy reserve which is ongoing currently because they see it as a store of value overtime.

Gold is a safe haven asset and has been existing since the ancient days. It will still have its value and people will always see both bitcoin and gold as the two best asset to invest in when bitcoin surpasses gold market cap in future. They are two different asset entirely.

[kanftka]

Fr. What will happen to that shiny rock we dug up for thousands of years, fought wars over, passed down as family treasure, locked away for safety? will it just sit there? will it still mean the same?

That's not going to happen overnight. We live in a world that has shifted and continues to shift from physical to digital, and therefore it is logical to think that at least a large part of the gold market will be eaten up by bitcoin. But there are functions of gold that cannot be replaced by bitcoin, such as jewelry or industrial uses.

For me, gold would likely lose some financial demand but still remain valuable due to its long history of trust.
Unlike Bitcoin, gold is physical and doesn't rely on technology, so it would still be used as a backup store of value. Central banks and individuals might continue holding gold as a hedge or safety asset.
While Bitocin could dominate digital finance, gold would likely remain important in a smaller, more specialized role. It's still very early to say such things.

Probably but technological revolutions happen in the blink of an eye. Maps also had thousands of years of history and today nobody uses a paper map. The change from physical to digital happened in a decade or so.

Without being able to say anything for sure, my opinion is that the market cap of bitcoin will surpass that of gold in a relatively short period of time, perhaps in the next 10 years, and that there will be a market for gold because of what you say and what I said before, but who knows. The future usually brings unexpected events.

True man, cool, I like how you explained it. You made some solid points. You're right, these kinds of changes don’t just happen all of a sudden, but when they do start, they pick up speed really quick. The paper map example you gave. Something that is been around forever can just fade out fast once people move on. Crazy..

And yeah, gold still has its own space, especially in things like jewelry related. That is value Bitcoin can’t really take away from it. But when it comes to holding money, moving the money fast, and keeping it safe, Bitcoin is clearly on another level.

That part where you said Bitcoin might pass gold market cap in the next 10 years, TBH, that is not even something to argue about, with the way the world is going, especially with people losing faith in old money systems, it is likely gonna happen..

Glad you shared your thoughts.

[OgNasty]

I don’t think we’ve had the gold we claim for several decades so does it really matter what happens to gold? They joked about auditing Fort Knox and the price of gold shot up over $1,000 an oz. It is obvious they didn’t have the gold and had to smash buy just on the threat of an audit. Now they’re going to resell that gold they just paid way above market value for to buy Bitcoin. Not gonna lie, that does sound like something the government would do.

[Danica22]

I believe nothing will happen to gold even if by some miracle bitcoin becomes the global reserve currency. Because gold is not only used in investment and national reserves but also applied in almost every field and corner of life. The role of gold in the real world is much more important and larger than we think it is just an asset for investment.

But honestly, I don't think bitcoin can become a global currency, because governments will never accept a currency they can't control. It is just a dream, a hope of bitcoin investors.

[YOSHIE]

b]In that kind of world… what happens to gold?[/b]

Can you not think strangely or speculate bitcoin and gold.
If you repeat the global history, we now live in the umpteenth generation, after this world experiences Destruction, whether it's war, natural disasters, curses and others that have never been thought of by humans.

Nothing happens with gold he remains a precious metal to the end, you should understand natural gold in the form of precious/physical metals, bitcoin operates through the internet or network.
You can see the war occurred in a total dead internet access and Bitcoin cannot be accessed, gold remains in the earth even though the country is destroyed.

That's the ratio between gold and bitcoin.

[_BlackStar]

With all the odds in my favor - I think gold will still be the choice even if most countries adopt bitcoin as a reserve. Gold has been around for thousands of years and bitcoin comes with all its innovations - but one does not replace the other and does not change its long-term potential. I believe gold will remain a hedge for a long time to come - even if human civilization has used bitcoin for everyday transactions, but gold still has its own role.

I have no illusions about bitcoin replacing all financial systems in the world, whether traditional or otherwise. Fiat, gold and other financial instruments will remain in place - their dominance may change, but bitcoin will not wipe them all out.

[Odusko]

I don’t think we’ve had the gold we claim for several decades so does it really matter what happens to gold? They joked about auditing Fort Knox and the price of gold shot up over $1,000 an oz. It is obvious they didn’t have the gold and had to smash buy just on the threat of an audit. Now they’re going to resell that gold they just paid way above market value for to buy Bitcoin. Not gonna lie, that does sound like something the government would do.

You get it man, what the heck are we talking about here talking about the importance and popularity of Gold severally and yet we don't even own one physical gold ourselves and for sure Bitcoin is here for just a few years and we are all included in the Bitcoin ecosystem, unlike gold, we love it but cant afford it so we need to choose one.

[Z-tight]

Gold is not even the world's reserve currency right now, but the U.S. dollar, however i know most countries have a large gold reserve. So first i don't think BTC can become the world's reserve currency, it is decentralized and i don't think centralized governments will favor it over their fiat. The U.S. dollar is going to be the currency for international trade for a very long time that's for sure.

Gold is a safe haven asset and a store of value, this is why many countries have large gold reserves. Many countries have also starting growing their BTC reserves, but it will take a long time for it to be anything compared to what they have in gold, but things can change in the future.

[DanWalker]

Stop comparing bitcoin to gold and thinking that bitcoin has a chance to surpass or replace gold because they are not the same. How can an intangible asset replace and take on the role of a tangible asset, and vice versa?

Additionally, if bitcoin becomes a global reserve currency, it will threaten the dominance of the USD as it is the global reserve currency, not gold. Gold has ceased to be a global reserve currency since the gold standard was abandoned. And OP, do you think the US would let something happen that would threaten the USD's position?

[traderethereum]

People still like gold and also use Bitcoin as reserve funds. With both, gold and Bitcoin, they are ready with anything will happen in the future. But we can not compare gold with Bitcoin because both are different and that will happen in shortly. Bitcoin still need more time to be adopted globally while gold was already reserve funds from a long time ago. So you can wait for that time while you can accumulating Bitcoin and gold in the same time.

[btc_angela]

With all the odds in my favor - I think gold will still be the choice even if most countries adopt bitcoin as a reserve. Gold has been around for thousands of years and bitcoin comes with all its innovations - but one does not replace the other and does not change its long-term potential. I believe gold will remain a hedge for a long time to come - even if human civilization has used bitcoin for everyday transactions, but gold still has its own role.

Yes, it has been with us during worst times, who would forget about WWII? And how every nation was paid or recovered from the devastation of war but thru gold? It is used to pay other countries and then nations started to stabilized their currencies and finance recontruction.

I have no illusions about bitcoin replacing all financial systems in the world, whether traditional or otherwise. Fiat, gold and other financial instruments will remain in place - their dominance may change, but bitcoin will not wipe them all out.

As what we have said, it's better that we have all of them, specially Bitcoin right now. Many are thinking that it should be a national reserve. And I have no doubt that it will be in the future. But it doesn't mean that Gold will be obsolete. It will not and may nations are still going to hold on and have gold + bitcoin reserves in their Fort Knox.

[Z-tight]

And OP, do you think the US would let something happen that would threaten the USD's position?

I don't know why people want BTC to be the world's reserve currency, i don't think it is even so important for a network like ours. I am happy with BTC's adoption, how countries are building up a BTC reserve, merchants accepting BTC, etc, all of that is great, but expecting BTC to replace the usd as the world's reserve currency is kind of absurd. Fiat plays an important role in economics and BTC wouldn't replace that, it is an alternative currency.

[davis196]

1.The short answer is... nothing. Gold will be just fine, if Bitcoin ever becomes a global reserve asset(which is very unlikely to happen).
The people would always appreciate having actual precious metals like gold rather than just a bunch of numbers hosted on a server.
The central banks would most likely use their own CBDCs rather than "staking sats". Don't bet your money on such massive global recognition of Bitcoin.
2.Oil being sold for BTC? I don't mind BTC being used as a payment method for oil trading, but I don't see the point. Fiat currencies are perfectly fine as a payment method for oil trading.