Let’s take a look at the analysis given by Forbes author Dan Runkevicius in an article Thursday.
His take is the increase of the value in bitcoin could surge due to gold investors seeking diversification and decentralization to store value.
“Unlike other commodities like oil, gold has limited use. For example, ~3,000 tons of gold were dug up and sold last year. And of that amount, just 35% went into electronics and jewelry. The rest was melted into bars and coins and stowed away.
Gold is not a medium of exchange either. You can’t walk into Pizza Hut, drop a sliver of gold on the counter, and get a slice of pizza. At most, you’ll get some strange looks.
And yet, central banks hold 34,000 tons of the shiny, yellow bullion bars in their reserves. Institutional and individual investors have sunk ~$2.7 trillion into gold. And every year, gold holdings keep growing and growing.
That’s because gold has just one job, and it does it very well. That is, sit tight in a vault and hold its value.
In fact, gold has outlived each and every modern currency that has ever been created. And for thousands of years, it has successfully fought off inflation and even gone up in value.
(As a general rule, an ounce of gold has always been able to get you into a decent suit—look it up for yourself.)
In other words, gold is the “insurance” against anything that might go wrong with paper money. Inflation, devaluation, or any sort of crisis that could eat the purchasing power of government-issued currencies.
Or as my ex-colleague Jared Dillian put it in a recent Bloomberg column: “Gold is a hedge against bad government decisions''
If just 20% of private gold holdings moved to Bitcoin, the crypto would double or more”
He continues to say that if Bitcoin earns it’s name on Wall Street, the future looks very good. He says trillions of dollars could flow into it and there is potentially untapped value left in store for the future. What do you think? Do you agree on his take? Let us know in the comments.
