While Bitcoin has been rising through the Pandemic, Gold has reached its ATH in Summer 2020 and went sideways from there with a weak downwards trend. Despite all the printing of paper money we don't see a rise in value of what many consider to be real sound money. Some say this is similar to the reason why we saw gold crash when the pandemic hit. Others actually start to see Bitcoin as a real competitor in the store of value space.
What do you think is the reason we don't see gold rising right now?
If you want to learn more about Gold or follow the latest news on precious metals I recommend Kitco to you
Personally I do not hold much gold. I gifted some out for Christmas and I would love to not just have gifted a random yellow stone nobody will pay any value for in 100 years. I also tend to invest in Coins since there I have a historical value, which could almost act as an insurance against a sinking gold price.
Silver
My main thing is actually Silver and I am very bullish on it mid-term. Silver has been known to be a spiker and I am expecting much from the little fella. I think the gold-silver ratio that existed for thousands of years shows that silver has been in hundreds of years of a bear market that spiked last century. Silver is very different from Gold, it is not just only pretty to look at but is actually industrially used and a lot of it in Technology Products!
I could see a world where the gold-silver ratio over-corrects to one to one if we see a shortage of silver supply against a rising demand. What do you think?
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Both Au and Ag are materials used in the industry, so I think they will be used also in 100 years. Most electronic devices, from cars to phones have a certain amount of Au, Ag and Cu in them, Cu being the most used. That Au is shinny and used in jewelry is another discussion, but from the industrial point of it, it is still present. Might be replaced by In for plating, but this is still very far in the future.
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But the industrial usage of gold is far less than most/all other metals. Jewelry is a very specific product than can easily be recycled back into gold.
So do you think gold might lose its status to Bitcoin as a store of value?
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It is far less used, because it is expensive. Everyone would rather use Au instead of Ag, Sn and some others but the price is prohibitive.
BTC and Au are two different asset classes which not exclude each other as they might be even complementary. Without electricity and internet, BTC is useless but if you want to transport bigger sums than BTC is better than Au. Each has it's perks.
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And yeah I haven't really though about gold being more used if it was cheaper at least compared to other metals. But I think Silver still has some unique qualities like being able sterilize, doesn't it?
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Ag is the best conductive material, but is not as corrosive resistant as Au. Ag is also tarnishes, losing it's conductive properties where Au doesn't. Au is also an antibacterial and not toxic material and is used in medicine for this, even if we have cheaper alternatives.
As a fun note, Au is used as a lubricant in the industry sometimes :)
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lol, I just always took the 2% of gold mined is used in the industry for granted and never really thought about it. Guess there will be a significantly rising demand for gold in the industry as well.
Thanks for commenting your take!
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I think Bitcoin could gain the status as the de-facto new money standard. Then I would expect that every individual would (according to his risk assessment) hold a certain amount of his wealth in gold, for example to hedge the risk that some fatal bug in Bitcoin's code should be found.
yes or a hedge against global power outages that would make bitcoin nearly unusable.
I always thought of Crypto and precious metals being a good combo against huge Crash, but I think the non-Crash/soft Crash scenario is getting more likely in which only Bitcoin really shines.
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This can not happen, because silver is not mined as a stand alone metal, but always as a biproduct of the mining of the other precious metals. Therefore, silver is what it is... Gold on the other hand, we have confirmed reserved that are not economically to mine. Once a new improvement of the mining & refinery is developed, or the price goes up, those activities become profitable.
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I think this could actually change, if silver goes 10x then people might have a reason to primarily search for it instead of just mining it as a by-product.
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I know silver is popular with many people, mainly due to the low entry cost. For the cost of a coffee you might get few grams of Silver. I own some of it myself, but I'm not a fan of it. For a reasonable saving account you need quite some space to store it, and it oxidizes. I prefer gold and platinum instead...
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I have admit I like the big mass, makes me feel like I have a real treasure when looking at my stack.
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"I could see a world where the gold-silver ratio over-corrects to one to one if we see a shortage of silver supply against a rising demand."
So you are essentially saying the price to mine silver is too low for it to happen?
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Yes, or more precisely that the increase of silver production can be done at rather low prices.
Interesting read. I don't know much about gold and silver investment wise. compared to crypto market, I have no idea what makes precious metals markets tick, do they share similar fundamentals as crypto markets?
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yes, since gold&silver used to be hard wired to money. Around 1870 it was forbidden to use bare silver as a means of payment (The Great Crime of 1872 or sth like that) And gold used to be the foundation of the dollar value. Until 1972 you could exchange dollar for a certain stable amount of gold.
Many Gold and Silver stackers also believe in a great crash where gold and silver will become part or at least wired to the money system again.
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gold & silber is also more easily to manipulate look how much bigger the paper markets compared to the real metal markets :)
yeah, the manipulation is a reason why I hope for a moonshot in Silver
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DEUTSCHES REICH
hihi, ist aber das gute Kaiserreich, die Münzen aus dem 3. Reich mit dem bösen Zeichen poste ich ein andermal ;)
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da steht aber ganz klar: DEUTSCHES REICH ^^
Nice read. I believe precious metals are a good option if you're looking to invest, mainly because they have kept pace with inflation and will probably continue to do so.
Have a good day ahead :)
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thanks, you too!
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Gold is going to have a tough time as the market realizes the economic collapse that is taking place is a deflationary one, not inflationary. Even the likes of Jim Rickards, long time gold bugs, admit that.
When it comes to inflation, gold tracks very well over time. It is not an asset that performs well when deflation is taking place. The idea of money printing leading to inflation is only resident in the dreams of the central banks. The reality is they cannot get inflation to save their lives.
Bitcoin might not have that correlation. The track record is to shot to know how it operates in a deflationary environment compared to an inflationary one. It seems to be establishing its own set of rules.
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what do you mean by deflationary collapse? I thought the money printing and the potential of the dollar losing it reserve/world currency status would lead to strong inflation. Where do you see deflation? Really in the dollar itself or do I misunderstand?
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