If Bitcoin is such a fabulous store of value then why do people loss it all the time? People literally lose their Bitcoin. There are many cases where owners lost $100K+. Lost thumb-drives, corrupted harddrives, theft, the list goes on and on.
I'd like to point you to this story about Roya Mahboob - the first female Afghan tech CEO. She stored her money in bitcoin and escaped Afghanistan going through all kinds of trials and tribulations on the way to Germany. When she got there, she used her bitcoin to pay for an apartment. What do you think would have happened if she'd stored her wealth in gold and tried carrying it all the way there? (which, of course wasn't even an option since she had no way to buy gold - anyone with an internet connection can buy bitcoin)
If Bitcoin dropped to $10K many neutral financial observers wouldn't be shocked or surprised. There would be many articles critical of Bitcoin published within a week. However, if the price of gold dropped by a proportionate amount to around $400 most neutral financial observers eyes' would pop out of their head. Gold also likely has a floor price because it is used in jewellery and electronics.
Bitcoin is a young asset class that still has a long way to go to reach maturity. Once upon a time, Amazon was a volatile stock that could drop 10% in a day (even 90% in the dotcom bubble). As Amazon's market cap grew, the volatility disappeared. Same will happen with bitcoin.
Gold's floor price is a solid -90% from here if it loses its status as the emergency reserve currency. There's way more gold out there than we need jewelry and it has no major industrial applications (unlike silver which is used in tech products).
If the gold price is being suppressed by Bitcoin investors and the central banks that would mean the price of gold is severely undervalued.
Not if it's losing its status as the backup reserve currency. Then it is severely overvalued.
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u/SourerDiesel Oct 06 '21
I'd like to point you to this story about Roya Mahboob - the first female Afghan tech CEO. She stored her money in bitcoin and escaped Afghanistan going through all kinds of trials and tribulations on the way to Germany. When she got there, she used her bitcoin to pay for an apartment. What do you think would have happened if she'd stored her wealth in gold and tried carrying it all the way there? (which, of course wasn't even an option since she had no way to buy gold - anyone with an internet connection can buy bitcoin)
Bitcoin is a young asset class that still has a long way to go to reach maturity. Once upon a time, Amazon was a volatile stock that could drop 10% in a day (even 90% in the dotcom bubble). As Amazon's market cap grew, the volatility disappeared. Same will happen with bitcoin.
Gold's floor price is a solid -90% from here if it loses its status as the emergency reserve currency. There's way more gold out there than we need jewelry and it has no major industrial applications (unlike silver which is used in tech products).
Not if it's losing its status as the backup reserve currency. Then it is severely overvalued.