What is the relationship between Bitcoin and Gold?
They are diametric opposites. Despite the heavy propoganda campaign being waged by Bitcoin publicists that make the case that both Bitcoin and Gold are inflation hedges - nothing could be farther from the truth.
In fact, Bitcoin is a risk asset. It behaves as a risk asset in that it goes up when the stock market goes up, and goes down when the stock market goes down. It is sort of like playing an option on the stock market. A lot of drama that feeds the gambling addiction with a promise of huge payoffs for the lucky few. Like an option it is a pure financially engineered gambling tool. But an option can be converted into ownership of an underlying asset. For Bitcoin, you simply own the idea. It is pure gambling for the gambling junky.
Gold, on the other hand is thought of as an inflation hedge - but it really hedges the byproduct of inflation - INSTABILITY. As faith in institutions crumble, as faith in the financial system crumbles. as faith in the political system crumbles - and most of all as faith in the currencies crumble - gold rises as an insurance policy for personal (and state) wealth, Because Gold is its own underlying asset - immutable, untarnishable, with a 5000 year track record of holding its value against all forms of instability.
Unfotunately to addicts - it is so boring. Often for years it does nothing but sit there. Lumps of gold that do nothing, but sit there. How dull. Just like an insurance policy when nothing bad happens. But when things go wrong, boy are you glad you owned some.
And best, of all as an instability hedge: Gold can not be hacked, Bitcoin exchanges are constantly hacked, and once hacked their assets are lost forever. And when quantum computing comes in a year or two, all blockchain will be obsolete. But Gold can never be obsolete unitl humans are obsolete. It has been etched in the human consciousness for all of known human existence, and there is no reason to expect that to change.
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