So, China is pumping money into gold to kind of undermine bitcoin, which keeps hitting new all-time highs while bitcoin is having a hard time. Meanwhile, the U.S. is backing bitcoin and pushing for its global adoption. What are your thoughts? Can bitcoin really overtake gold as a safe haven asset and eventually surpass gold in market cap?
Do you really need BTCs cap to be as big or bigger than gold's to see results of the adoption toward it?
I would reconsider some points and thoughts regarding this "rivalry" of sorts then..
Hello, my name is Dogedegen. Welcome to my TED talk.
Gold is boring, it has an unlimited supply, and let's face it. It just sucks. You are only interested in it because you have been conditioned to like it since you were born.
The end, thank you for listening.
We do not know the future but right now, no asset like gold, but more governments can turn to gold in the future. China does not want to adopt what they can not control.
If the governments can adopt bitcoin the way they adopt gold, it is better because bitcoin is more of money than gold in ease of spending.
Oh my gosh!
Does "China investment in gold" mean they are trying to take down Bitcoin?
It's not, that is my answer. These things are not mutually related with each other at all.
China is one of nations in which gold is a favorite asset from government to their citizens like some other Asian nations such as India and Middle East countries. Not only China, but many countries have been accumulating gold very intensively in the last three years.
China and their government many times tried to be against Bitcoin, crack down Bitcoin mining and more but Bitcoin has been growing up more, decentralizing itself more from China. Bitcoin miners and mining pools have had a big migration from China to other nations since China Bitcoin mining crack down in 2020.
China Regains Bitcoin Mining Hub Status Hashrate Dominance Shifts to US.
China buying more gold to their reserve doesn't mean that it will bring down bitcoin. They're two different assets. However, bitcoin cannot be taken down rather, bitcoin will attract more people to adopt it. Majority, of people, entity, and government are currently interested in having a bitcoin reserve but the know that gold exists.
China can do whatever, they want. After all, they have banned crypto quite a few times because they cannot control bitcoin. With the gradual increase in bitcoin adoption, in future bitcoin will surpass gold marketcap. Look at when bitcoin was created and look at her marketcap now being one-tenth of gold that has been existing before Jesus came to the earth.
I don't know where you got the inspiration from that gave you the mind to write all this pis of shits, and I don't know how you came about this propaganda which you're spreading that China want to bring down bitcoin, and beside china can't bring down bitcoin hell no, and even if China want to bring down bitcoin is it by investing in gold that is boring?. Because I have over think my brain on how China can bring down bitcoin and nothing is coming up dude. and let also correct you on one thing here, bitcoin is not struggling the more investors enters the bitcoin market the more bitcoin reach new ATH just like gold, china can chose to invest in gold that is boring, let other countries chose what asset to invest on. And even from the look of things gold is dumping badly and money is now rotating into bitcoin, Individuals, institutions and Governments now are turn to bitcoin, because bitcoin is money and a store of value with potential returns.
The current price of Bitcoin has nothing to do with China, US or Gold. It's something else
By the way, Bitcoin is a virtual currency, more suitable for online Store of Value and Medium of exchange, can easily be controlled by their owners and carried around by them anywhere. While Gold is more suitable for offline store of value. .. This means you need to have physical gold to qualify as an actual gold holder or you need to be sure there is a gold reserve somewhere that you can fully control without difficulty.. And Gold will need to be divisible and neutral like Bitcoin to be a desirable Medium of Exchange or as a currency not controlled by governments like they control fiat currencies.
Finally, gold is a different asset class that does not necessary fit the kind of role we need Bitcoin for. What we need is a decentralized, transparent, immutable currency/system, alternative to fiat currencies/system, operated and used by independent communities, needs little to no permission/trust to use, and can be fully controlled by the communities. Gold does not fully qualify for that, if it does, there will be no need for Bitcoin.
On the one hand, gold is one of the assets that poses the biggest threat to Bitcoin, the increase in gold prices or reaching their highest point makes investors more likely to choose assets that are more stable and proven as a store of value, such as gold, compared to Bitcoin which is very volatile. On the other hand, Gold and Bitcoin have different characteristics, both have their own advantages and disadvantages, Gold has a long history as a store of value and safe haven asset, while Bitcoin is considered as "digital gold" because of its scarcity and decentralized nature.
My answer to the title you used, it depends on the angle from which the investor views both and the strategy depends on the choice in allocating his portfolio. Gold offers stability and security, while Bitcoin has high growth potential, usually Investors who are not afraid of volatility will choose Bitcoin, another reason is because Bitcoin is superior to gold in all aspects including the potential for rapid growth, easy to carry in large quantities and can make transactions anywhere and anytime.
To increase Bitcoin market capitalization beyond gold, clear regulations from the government are needed (looking at Bitcoin as they look at gold), increasing adoption and infrastructure development such as ETF, then sooner or later Bitcoin can become more stable, liquid and increasingly attractive to investors.
It's a misconception to say Gold is a threat to Bitcoin or Bitcoin is a threat to Gold, both can survive depending on the market condition. It's also not right to say China is trying to bring Bitcoin down, China is only doing what is good for his country, and no thanks to Donald Trump himself, which you never mention.
If you look at the world's financial dominance history, you would realize that the power of currency or assets invested in often shifts. It's time of the USD/US now, nothing holds that power forever. It's even wise that China and other central banks are diversifying, and of course, Gold is their best alternative.
Now, how it affects Bitcoin is simple. Bitcoin is a risk-on asset, and situations like this doesn't favour such. Aside from the trade war and diversification, we are in another Cold War era.
While I was writing this I just have a look on price of Bitcoin at coinmarketcap.com and to my surprise in last one hour it went up from 104.2k$ to 112.4k$, almost 4k gain in last one hour. I don't agree with OP point that gold is going up while BTC is struggling. Bitcoin went down few days back but since then it's trying to recover and good thing is it didn't went below 100k$. Earlier this month we saw Bitcoin hitting it's ATH of 125k$ and now price is 112k$. We can't expect Bitcoin to keep going up everyday, price has to make correction after massive gain.
Bitcoin is a peer-to-peer asset, while gold was used in a similar way thousands of years ago. Even then, only a few had access to gold in the Middle Ages. What I'm saying is that governments may have gold reserves, but the fact is that Bitcoin is a more practical asset in terms of being used for transactions, since we all know that gold is bulky. Even though most people tend to use Bitcoin to store value, bear in mind that ease of access and adoption is easier with Bitcoin than with gold, especially for businesses and everyday people. This is the reason many companies, such as Strategy, are going for BTC instead of gold. So in the long run, expect Bitcoin to be the dominant reserve asset, even though I don't see most governments using it as one. The sheer numbers and strength of many corporate entities going for Bitcoin favors it.
Gold has never been a threat to Bitcoin, as both gold and Bitcoin have become investment options for both countries and institutions, whether China buys more gold as reserves for its country is their decision, it could be because they view gold as a stable store of value, especially amidst the current global geopolitical and economic uncertainty, they may see gold as a better option than Bitcoin.
but that doesn't mean Bitcoin is no longer attractive, just look at the fact that more countries are adopting Bitcoin as their strategic reserves, and that number is likely to grow. this indicates that Bitcoin remains the best choice for countries as their strategic reserves.
A country buying gold doesn't mean they want to bring down Bitcoin. If their goal was to bring down Bitcoin, that would be a very lousy strategy. Gold is an asset that countries hold as a reserve. Countries also hold the dollar as a reserve currency. If they decide to buy more dollars, does that mean they are also trying to bring down Bitcoin?
Gold performing well doesn't mean it will bring bitcoin down. These assets have times when they pump and when they dip, so it's normal.
Gold has been in existence forever, so of course, it will be a safer asset than bitcoin. I don't know if a time will come when bitcoin will be safer, but I know bitcoin can perform better as it has already shown. As for the market cap. It's going to be a long time before Bitcoin gets to $10 trillion, not to talk more of reaching Gold's $30 trillion. Gold is the asset with the highest market cap, and Bitcoin is not even up to $3 trillion yet.
By the way, market cap is an overrated way of rating an asset.
I don't think China's strategy of investing in gold is directly aimed at bringing down Bitcoin but rather at showing how world powers are using various hedges against the dollar. Gold is an old trusted asset physical proven by history.
I think the key is that acceptance can change everything. If more institutions and countries adopt Bitcoin as a reserve asset it could eventually surpass gold's market cap. And how the use of Bitcoin is increasing. I think all countries will start dominating bitcoin very soon. For now I think it's just a story of new digital assets versus traditional safe havens.
You got it wrong, mate. China's investment in gold has nothing to do with Bitcoin. The reason for investing in gold is not to fall the price of bitcoin, but rather to reduce the reliance on US dollars. China is a member of BRICS, and one of its objectives is to de-dollarise the dollar. Investing in gold shields China from US sanctions, as gold can be used for international trades.
One thing you should know is that gold has been in existence for centuries now and Bitcoin has just been in existence for some years, gold has already gotten world recognition and adoption for a very long time, a lot of people have been investing in gold for many centuries now so it will be very difficult for Bitcoin to become bigger than gold, however I believe with time bitcoin will be more bigger than gold, and the reason is very clear the word is now going digital a lot of things are not done online so Bitcoin will surely gain more trust from people.
Whether China is investing on gold or not should not be our concern they can invest in whatever they wish to invest in that is their right however that cannot stop bitcoin growth so I don't see that as a problem, all what bitcoin need in order to surpass gold is time, as Time goes on bitcoin will become more valuable than gold.
This is a very, very short term analysis. We have already discussed it in other threads: If you take more than a single year, Bitcoin's profitability is higher. And ... remember that Bitcoin had also ATHs a few weeks ago? That it's currently trading only 15% below its ATH after a significant profit taking wave? Bitcoin is not "struggling" at all.
I agree with others that Bitcoin has no need to "defeat gold". While both can be used as store of value, Bitcoin's potential is in theory much higher. But gold has tradition. (I personally think gold is not even really attractive, and several girls I know think also that gold based jewelry is ugly and silver-based is more attractive.)
But I made actually a thread about that topic.. Because of course for Bitcoin investors it is a relevant point if they will compete with gold eventually.
My opinion is that Bitcoin still is perceived as much riskier than gold and thus fear is holding both people and institutions back. And volatility-wise this is also correct: gold has about 0,6 to 1,0 % 30-day and 60-day volatility, while Bitcoin has normally between 1 and 3% (with some "dips" under 1%). Gold crashes can be deep, but they usually don't lose more than 50% from the ATH. But Bitcoin's volatility is decreasing, so it may be a matter of time to converge with gold's. And institutional opinion about Bitcoin is slowly changing.
The Bitcoin community can actually help with that. The recipe is easy: convince people to focus on long term investment, above all buy the big dips (i.e. these times when everybody thinks Bitcoin is dead, and they were always wrong until now!), and invest via DCA and similar patterns, or trying to earn/accept Bitcoin as a merchant.
You should rather be asking, is Bitcoin a threat to gold? Between Bitcoin and gold, which one existed first? Gold, so Bitcoin coming into existence with its features should rather be a threat to gold because Bitcoin is a digital gold as well as money and a store of value just like gold, plus a hedge against inflation. Bitcoin is freedom; gold is owned by the government. If we start comparisons between these two asset classes, it's obvious that Bitcoin is an existential threat to gold .
Instead of thinking that gold is a bigger threat to Bitcoin, we should know for one that Bitcoin is called digital gold and it is often seen as an inflation resistant store of value just as gold is and will continue to be very relevant in the currency market.
Instead of considering gold a competition to Bitcoin, we can see them as partners in the category of long term investment, because they are just like two sides of a coin with gold being analog and Bitcoin being a digital currency of value.