By Angela Ilievski – Coinfloor Autobuyer on the Bitcoin journey towards monetary re-education
The war of words on social media between ‘gold bugs’ and crypto fanatics is puzzling.
As the saying goes ‘my enemy’s enemy is my friend’. So, with both camps strongly opposed to central bank money printing they should be on friendly terms. On the contrary, they are poles apart.
The headlines in this bitter online debate often feature bullish price predictions.
For gold bugs such as Euro Pacific Capital CEO Peter Schiff, Bitcoin is an over-hyped fad which will crash to zero, whereas gold has stood the test of time as a store of value. His forecast is $5k an ounce.
For crypto enthusiasts such as Max Keiser of The Keiser Report, Bitcoin is a libertarian dream of self-sovereignty, a ‘hard money’ alternative to debased fiat currency. His price call is ‘100k to infinity’.
Occasionally, you come across a professional investor who likes both – such as Mark Valek of Incrementum. Although primarily a gold analyst, he has been buying Bitcoin since 2011, seeing the two as complementary assets; a way for investors ‘to weather the coming economic storm’.
Bitcoin has been described as ‘digital gold’ and shares some properties with the precious metal: mining as method of production, (gold by physical effort, Bitcoin by computer), inherent scarcity of supply (171,000 metric tons of gold, 21 million Bitcoins) and neither is issued by a central bank or federal government.
As a metaphor, gold represents value and prestige: ‘a golden opportunity’, ‘a heart of gold’, ‘the gold standard’ etc. However, it is the tangible qualities of gold – its weight, feel and shine – that attract the older (white male) ‘gold bug’ demographic. They love that you can carry it around in your pocket.
By contrast, supporters of Bitcoin tend to be more diverse, younger and less conservative in profile. Described as ‘digital natives’, they live their lives online; a lifestyle which is reflected in their value systems. The number of Instagram likes means more to millennials than the number of coins in their pocket.
Can gold’s physical tangibility retain its appeal in a data-driven digital world more suited to Bitcoin?
The trend towards living online has accelerated during the recent Covid-19 pandemic. More of us are working, shopping and socialising from home. Corresponding rises in tech-stock prices and valuations contrast with indicators that ‘the real economy’ is declining. This paradox has prompted many investors to lose faith in equities and bonds and flee the stock market in search of safe havens.
In my case, the devastating impact on savings’ returns from ever-falling interest rates has forced me into a retirement ‘mindset reset’, diversifying my portfolio with precious metals and cryptocurrency. As a defensive strategy, this seems to be a sensible hedge against the instability of the markets. More optimistically, recent price movements are actually giving me a strong return on my investments in both.
Among finance professionals, many traders, analysts and investors have moved beyond the ‘either/or’ debate, dismissing campaigns like Greyscale’s 2019 #DropGold advertisement as a PR stunt. The war of words on Twitter is distracting us from the real-life debate we should be having about the fundamental flaws in the financial system.
Why does it have to be ‘either/or’? Why not ‘both/and?’
Gold deserves a place in your portfolio based on its proven track record as a store of value. Bitcoin’s time is only just beginning. As education increases understanding of its value proposition and technological developments increase its usability, Bitcoin’s adoption, market cap and unit price can only grow.
Bitcoin is the future.
When you are presented with ‘a golden opportunity’ to buy the future. Take it.
I am a 60-something retired teacher living with my partner and 20-something son in Bournemouth. In an era of low – potentially negative – interest rates, a looming recession and a stock market increasingly detached from the real economy, my own reading and research into Bitcoin has convinced me that it represents a fascinating investment opportunity. With a limited disposable income and a lifetime savings habit, the Coinfloor Autobuy account is a hassle-free way of investing in Bitcoin. My objective is to diversify my investment portfolio, preserve my hard-earned capital and – over time – generate a decent return.
Image Credit – The blog post image is from Aleksi Räisä, on Unsplash.