Bitcoin has a market cap which is less than Tesla stock, so its price can move swiftly in any direction. Gold has a $9 trillion market cap, and that doesn’t include gold bars stored in the vaults of 100+ sovereign nations. Sovereign nations are not buying Bitcoin; gamblers and other people who bet in horse races buy Bitcoin.
If you’re wondering if Bitcoin can really become money, ask yourself the following question. What allows the governments of sovereign nations to rule over people?
1. Military and weapons
2. Gold and silver (usually the nations that have the most)
3. Control of narrative, belief, psychology, and taxes
In the context of 5000+ years of world history, convince me how the governments will ever let Bitcoin become currency, and I’ll delete this post. I know the U.S. government will do whatever it takes to protect the dollar, and they can! All they have to do is make Bitcoin illegal tender, inflate the cost of electricity, raise taxes, or shut off the Internet and this people’s money is toast.
On a practical note, it currently takes five times more energy consumption to clear all Bitcoin exchanges than it takes to clear all the world’s visa transactions. Think about how impractical and expensive that will become later, if Bitcoin ever becomes bigger than a penny stock in the world of financial assets.
And explain why Bitcoin is cleverly disguised as a physical gold coin, when it’s nothing but a digital code. That’s a good one in the narrative, belief, and psychology part of the equation. It’s what you call fool’s gold. And it’s a clever distraction that doesn’t threaten the U.S. dollar, for now, so the governments don’t worry about it.
To me, Bitcoin is a clever speculation, along with countless other crypto currencies. But when the governments are ready for digital currency, they’ll simply create their own. They have no incentive to make Bitcoin their money. What is Bitcoin anyway? Blockchain is what matters and you don’t invest in it via cryptos.
Gold and silver are safe haven assets, especially gold. It has a rich history of preserving wealth for people when fiat currency fails. Gold is real money, and if it wasn’t real money, it wouldn’t be locked in the vaults of 100+ sovereign nations around the world while the central bankers print fiat currency out of thin air.
These are the facts, and the facts won’t change. It’s been the game for 5000+ years among those with the power and wealth. Gold always does an accounting for fiat money debasement. It’s a hedge against monetary debasement, ever-increasing debt, too much leverage in the system, and the evaporation of liquidity. That’s why the governments always win, and always stay in power. Buy gold like they do, and you protect your wealth. Print money like they do and you go to prison. 🙂
You can make or lose a lot of money on Bitcoin. The only thing that gives it value is belief, as well as the gamers who sell it back and forth to each other. Physical gold is something that has universal and historical value. It dates back to Genesis in the Bible and is deeply embedded in the mind of man, in language, thought, and so on. That’s why Bitcoin has borrowed the gold coin for its logo and the term “miners” for its computer framework. It wants people to believe it’s gold, like Lucifer wants you to believe he’s God.
Let’s look at some terminology. Money is not currency. Currency is an IOU for real money. It is redeemable for something tangible. Fiat is a currency established as money by government regulation. It does not have intrinsic value but has a military to defend it. Bitcoin is not currency or fiat; it is speculation, an unrealistic dream for the future where there is no government and the people control everything. Fat chance!
In this age of speculation, people think they can generate real wealth and value out of thin air, without any material input or productivity. They think they can get rich quick because they’re smarter and got in earlier than others. But if you go back to the barter system, you’ll understand how money actually works. Money is something. Currency is backed by something. Fiat is backed by military force.
Bitcoin investors do not have a military or any real assets backing their digital codes or beliefs. They have no assurance of sufficient or reasonably priced electricity, no assurance of Internet or continued belief in the dream of a people’s money. They have a cool fantasy, and they’re making a bet that government won’t care or intervene in their world, run and ruled by the people.
Most investors are not in Bitcoin because they really truly believe that it will become the new money. They are in Bitcoin as a speculation, a bet that people will be dumb enough to buy into it, from fear of missing out. It’s a pump and dump scheme, nothing like and far removed from gold. Gold is the asset of sovereign governments, not a pet rock. Bitcoin is the invention of tech geckos and a get-rich-quick scheme in speculative markets.
Bitcoin may go up a lot, if you really want to play the game, but don’t bet anything you aren’t willing to lose in this risky deceptive experiment. We are living in the biggest mindless market mania and monetary debasement ever seen in the history of the world. Anything can happen and anything can go wrong.
I’m invested in one digital security, and that’s Tzero (TZROP). I have a very small amount, but I believe this technology could become what runs the financial markets, for a lot of good reasons. I’m not in it because I think it will become money; I’m in it because I speculate about a purpose it will have in the future world I see coming. At the right time, I’ll buy more; but for now, I’m fine with the little bit that I have.
As usual, this is not financial advice; it’s one humble opinion from a person who has no professional training in finance and won’t buy Bitcoin, ever.