I actually agree with this. I see 2 types of "money". One with price stability and goods denomination as its priority which (it necessarily follows) must be inflationary. One for long term store of value which (it necessarily follows) must be deflationary.

Bitcoin therefore falls in the latter category due to its limited supply and, as you say, may be used as a capital base to back other monetary exchange media.


What about "bearer token" status ? Isn't that kind of the elephant in the room here ? Why do you think gold has lost the ability to anchor its value to its restricted supply ? This is something many people seem to take for granted - because they say that gold has "worked for thousands of years" so it must work now. The only problem with that is that we had physical markets for thousands of years and we don't anymore, so there's no longer the same basis for gold's monetary value - at least as far as it's derived from its monetary properties.

Gold is not the ultimate money. It has failed miserably, for example, to signal the massive amounts of fiat monetary expansion that's gone on in recent years which is one of its primary roles as a monetary asset. It has also suffered massively from the decoupling of ownership transfer and possession transfer in its significant markets. I think people say that "Gold is the ultimate money" simply because thats just something that everybody says. But when you actually analyse it, it isn't.

I'd say that it will still be good for sovereigns - because they do actually take possession when it matters, like China is doing. But apart from backing national currencies, its role is now limited as is it's upside compared to an asset like Bitcoin IMO.