Goldman Sachs Says Gold Is Better Than Bitcoin

“Precious metals remain a relevant asset class in modern portfolios, despite their lack of yield,” analysts including Jeffrey Currie and Michael Hinds wrote. “They are neither a historic accident or a relic.” Looking at properties such as durability and intrinsic value, they are still relevant even with new materials discovered and new assets emerging, such as cryptocurrencies, they said (LINK)

Here’s what blows my mind:  When gold ran from $250 to $1900, the entire western mainstream financial media called it a bubble. Bitcoin has run from $250 to $5500 and price momentum-chasers and the usual hypster con artists exclaim that it’s going to $100,000. Qu’est-ce que c’est, Rudolph Havenstein?

This is typically what a bubble looks like:

NVDA is without a doubt in a parabolic bubble. In a recent Short Seller’s Journal I explained in detail why NVDA’s fundamentals might justify a price closer $30 and provided ideas for shorting NVDA. Short-selling is the market’s method of introducing accountability and price discovery into the valuing assets. The problem with Bitcoin is that it can’t be borrowed and shorted. There’s no mechanism to impose express a bearish view of Bitcoin’s fundamental value.

The Goldman report goes on to say:   Intrinsic value:   There’s a limited supply of gold and other precious metals in the Earth’s crust, whereas in the case of cryptocurrencies, it’s easy to create alternatives, meaning there’s effectively no control over supply at a macroeconomic level and no intrinsic value due to rarity.  Unit of account: Gold is better at holding its purchasing power, and has much lower daily volatility. Bitcoin/dollar volatility has averaged almost seven times that of gold in 2017, the bank said.

All the pro/con-Bitcoin noise aside, without question the Bitcoin chart reflects “bubble-mania.”  Not everyone is “all-in” yet. As with all manias, it will probably become even more manic before someone whispers “fire” and the move toward the exits quickly goes from a brisk walk to a stampede.

But if everyone who has faith is all-in and no one is short, who will be left to buy when flood of sellers are looking for any bid to hit?

7 thoughts on “Goldman Sachs Says Gold Is Better Than Bitcoin

  1. You do have to love the way they want to point out how there is a limited supply of gold in the earths crust, and so it has intrinsic value due to scarcity. Crypto on the other hand can be created easily so there is no limit on supply.

    Funny, they never want to make these argumemts about Fiat currency vs gold.

  2. The main difference between gold and bitcoin is the fact that the gold market is regulated in the sense that price movements are cointained to a certain range. In the case of bitcoin, there is no such price regulation, hence the price of bitcoin rises in essentially unconstrained way.

    Bitcoin is essentially the next step in the development of fiat money. The future belongs to blockchain based cryptocurrencies, not necesserily bitcoin. Gold will forever remain a rare and valuable commodity. It is too valuable in order to circulate as a currency. Gold is the safest financial asset there is.

  3. If you believe Goldman Sachs you as good as dead.
    The Bitcoin is Ponzi scheme. I have read somewhere that 4 entities own most of it , including J.P Morgan.
    What happens when system freezes , can you use it?
    Only money is Gold.

  4. Try sending a few million dollars worth of gold to Hong Kong in a few minutes. Sure you can send a receipt for the Gold but then would have to trust the holder of the gold….wait a minute….maybe that’s what this “trustless” talk about crypto currencies is all about!

  5. Looks short term they are setting gold up to visit the 200 day ma. In other words the low 1250’s. Hope I’m wrong but this just goes on and on. All the pundits have been wrong so far. How many times have I read the silver price is about to explode? For the last 4 years.
    I just can’t see what is going to end this when the cartel can print an unlimited amount of money and there is no rule of law. Having said that I’m still in gold because of the lack of good options.

  6. There are 118 known elements. Some are valuable, some are practically worthless.
    There are 180 world currencies, some are “valuable”, some are practically worthless.
    Some being worthless doesn’t make the others worthless. One could argue just the opposite.

    At one point, the Internet companies were practically worthless As more people started using them they became valuable.
    At one point Bitcoins were practically worthless. Then the Bitcoin hashrate started exploding, and more people got involved, Bitcoins became valuable.

    It’s the network effect. The more people adopt a technology, the more valuable it becomes. Even a technically superior product cannot always overcome mass adoption of a competitor (eg. Betamax vs VHS). The Bitcoin network is so far ahead of anything else that new Cryptos have little chance of capturing share, barring a new massive technological advantage. Ethereum is a good example of a new advantage, everything else so far, not so much.

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