I've recently thought a bit about a scenario where Bitcoin replaces different kinds of assets. This is often discussed as part of the "Total Addressable Market" (TAM) approach.
I think it could have positive consequences if
Bitcoin replaced gold as the leading reserve asset, mainly for companies, but also for central banks maybe (even if I
have also some problems with that)..
First, Gold is almost 100% improductive. In contrast to stocks: if you buy stocks you help the company behind them to satisfy the needs of people.
Bitcoin, instead, can be considered at least a bit productive: it has some advantages that benefit the economy if it is widely used, like eliminating some friction, above all in international commerce. It also could remove intermediaries which are of a "parasite" character in my opinion, like credit card companies which artificially inflate the prices of many goods due to the merchant fees. And it also encourages innovation in the crypto sector, while the effect of gold-driven innovation in mining for example should be much smaller.
Second, a high gold valuation instead even harms some companies, mostly those who require it as an input (material) for their own production, above all in electronics. If gold crashed back to its "industrial" value (less than 10% from now), then several goods could be (a bit) cheaper.
And third of course there's the ecological benefit if there was less gold mining. Skeptics could say this would be compensated by Bitcoin's energy use, but in theory Bitcoin can run on 100% renewable energy. Mining gold instead always produces ecological harm.
I suspect these effects are quite small, but they could be significant enough to have a positive effect on the global economy.
What do people think? Is this true, false or is the effect too small to be relevant? Are there other possible (and also negative) effects I forgot?
PS: In contrast I think it could have negative effects if too money flows from the stock market to Bitcoin, because that would increase capital cost for businesses. But for gold, I think the effect should be positive.
Poll
