Re: Central banks and financial instutions selling gold to retail to buy crypto
⭐ Merited by JayJuanGee (1)
JJG what are you referring to when you say that bitcoin is currently about 10x gold's price? Total market capitalization would be bitcoin = 1/10th of gold, which makes it even more attractive to investors. Since an nounce is a bit more than $3k, did you have a different unit in mind?
You are correct. I made a mistake, since I was referring to bitcoin's market cap as compared with gold's market cap, and I had meant to say that bitcoin is currently about 1/10th of gold's valuation, so relative to gold bitcoin has around 10,000x to go in order to be approximately at a fair market value, which might take 50-200 years to play out, perhaps?
I edited my above post to show the correction to say 1/10th..
No harm done obviously, I thought you could be referring to a unit that I am somehow missing.
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I am not sure how much we need to get into details, since there are likely quite a few ways to measure it, yet even gold's value has been perverted by the various inaccuracies involved with our using the dollar as our measuring stick.
I suppose that we could find a basket of goods and then try to compare at various points in time, and I surely don't even like to measure bitcoin prior to 2012, since I think that is a bit unfair since bitcoin barely had a price at that time. It is llikely even unfair today since bitcoin is still a very immature asset class, yet even if the whole game is unfair, and bitcoin is likely going to continue to grow stupendously based on it being an immature asset, as individuals, we likely should be trying to take advantage of such unfairness and surely one thing that really is fair about bitcoin is that it is available to everyone and anyone as long as they have some kind of a discretionary income that they can muster up to buy some bitcoin... sure gold is available to everyone and/or anyone too, even though surely gold is a lot less liquid than bitcoin and also we can look at the varying other monetary properties (such as scarcity, verifiability, transportability, divisibility, costs/abilities in holding it and other monetary qualities) to see each of the ways that bitcoin is multiples (if not magnitudes?) better than gold and in the aggregate likely in the arena of 1,000x better than gold.
I couldn't agree more with everything you said here. I believe the biggest fear that many potential bitcoin investors have is that the blockchain could break and they themselves can't develop a final opinion on whether or not they can live with that risk in mind.
I am not a physicist and I have done some research sporadically whether gold could one day be created synthetically. One argument gold investors bring up is because gold has properties that can be used in electronics and other things like medical applications. I then tried to find out whether gold 2.0 could one day be created and it says that the energy required is too high and therefore prohibitively expensive. But who tells me whether an unknown breakthrough is in the making and a derivative could be created that fulfills all the requirements gold can fulfill? Or maybe 80% of it? The argument would at least fall apart partially that gold can be used to do things nothing else can be used for.
If there ever was a meltdown in the gold price and fire sales were going on, I would not like to be a gold certificate holder telling my bank to sell because maybe the bank was never owning the gold in the first place. In bitcoin fire sales could happen, but at least I don't just own some promise printed on a paper or some numbers on a screen suggesting what I "own", but I can act in an instant and make my own decisions while not having to trust that a third party lived up to their promises.
There are always going to be various kinds of shitcoins, and sometimes good people will get sucked into losing their money through such scams, and they sometimes might even make money and get deluded into thinking that the shitcoins are the real thing blah blah blah... so there are going to aways be differings of opinion about value and where to invest value, time and energies... and sometimes the less valuable assets will win in short-term timelines. .. .. and sure even with bitcoin, it is not guaranteed to concur, even though it seems several multiples, magnitudes, even 1,000x greater than any possible current competitors.
Yes and there will be people saying that they knew ETH would beat BTC now in the short run, but the truth is that ETH was once very close to BTC and BTC dominance was down to around 30% and ETh was almost equal. Short run analysis makes no sense as it is for those who tend to bend the truth to justify some of their unjustified decisions. The shitcoin thing you talked about is the best example. A story that never gets old when in 2017 everyone thought they are pro traders.
But all of those who didn't sell got stuck with garbage and zero dollars in the bank account. Hats off to those who sold all their shit coins at the peak and bought as much BTC as they could. That was a masterful move, but I suppose only a very small minority did exactly that.