Bitcoin Will Eat Gold

5 min readMar 12, 2021

Bitcoin Will Eat Gold

A major cryptocurrency trader has claimed that the value of Bitcoin will go infinite and eventually become the world’s currency. JPMorgan predicted this in a new report, first published on Coingape, according to the Wall Street Journal.

MicroStrategy CEO Michael Saylor likened Bitcoin (BTC) to a dragon that will eventually devour gold. When the Bitcoin dragon emerges from its cave, the first thing it will do is eat the Kingdom of Gold.

Gold’s market capitalization is currently around T $10, and the less volatile Bitcoin is, the more we can see the value of gold rise. As Decrypt notes, the price of bitcoin has tripled in the last year and a half. When bitcoin reaches the current gold market — cap — its price will be around 540k.

This means that Bitcoin investors are relatively early in the game and BTC is still undervalued as it approaches the 20k, but more people will know about it and there will be a stronger consensus. Indeed, what applies to Bitcoin today will apply to all other cryptocurrencies that may crowd it out in the future. Bitcoin and gold can coexist as a store of value for the foreseeable future, just like gold and silver. I believe that the price of Bitcoin will fall sharply one day — but that does not mean that the cryptocurrency is doomed to failure.

Gold’s role as a store of value is firmly anchored in the global economy, and Bitcoin complements the yellow metal. The first step for Bitcoin will be to replace gold as a store of value for investors. Some investors and advisers are recommending that bitcoin replace gold rather than replace it.

Gold maximalists, however, believe that Bitcoin is a volatile digital speculative asset that does not hold up well. While the argument that Bitcoin is “digital gold” has disappeared, Grayscale argues that this is not true, as it is an evolved digital asset that will play a better role as a store of value than gold once did.

As the renowned investor Ray Dalio put it in a recent note on Bitcoin, competition will play a role in setting the prices of cryptocurrencies and other currencies. As such, Neuman believes that Bitcoin will also break into gold’s market share as a safe haven of choice, but that remains to be seen. Cryptocurrencies could be even better than gold — affiliates like Coinbase and Bitfinex, which now allow their users to trade and hold Bitcoin on their platforms. This closes the loop, making the digital currency more attractive to investors than traditional gold.

The convergence of volatility between Bitcoin and gold is unlikely to happen so quickly and is, in my opinion, a multi-year process. Even if investors find their Bitcoin investments successful, Bitcoin is anything but risk-free — free. Bitcoin’s price volatility has made it an attractive option for many large institutions looking to protect their money. Bitcoin could be soaring, “says David Karpeles, the best-selling author of The New York Times Bestseller Book on the digital currency.

He also says that despite the fact that there is a fixed offer, Bitcoin is the only digital currency with a real-time, xrp coin cap and is much more volatile than other digital currencies. What happens if you are a Bitcoin investor, if the supply of Bitcoins remains low?

The thing that speaks to Bitcoin’s popularity is that younger generations are open to Bitcoins and not keen on gold investments. Bitcoin advocates also point out that the cryptocurrency is likely to remain attractive to investors who see it as a store of value in times of inflation. If bitcoin rises, it could double or even triple in the next few years, according to analysts.

In the coming years, Bitcoin could slowly lose market share of gold over a period of time. Last month, a JPMorgan analyst said that bitcoin was gnawing away at gold’s market share. Also recently, Bitcoin co-founder and CEO Satoshi Nakamoto remarked in a tweet that “Bitcoin will replace gold,” tweeting, “Is Bitcoin replacing gold?”

A report by analysts at Goldman Sachs argues that Bitcoin will not consume the lunch for gold, and that gold will take over the role of Bitcoin as the world’s most popular digital currency in the next few years. I think the idea that Bitcoin will “eat gold lunch,” which is often repeated by non-bitcoin investors these days, is wrong, but it seems to have convinced some investors.

Goldman Sachs, one of the world’s largest investment banks, reports that Bitcoin is outpacing the gold exchange — traded funds (ETFs) in the US gold market. Unlike cryptocurrencies, gold is an international commodity, and its market is the largest and most important market for gold and other precious metals.

While Bitcoin is a newer form of investment that has certainly experienced a lot of hype, gold has retained its value for centuries. The core assumption is that digital assets are likely to resemble gold, and that the power of Bitcoin revolves around the scarcity of gold. This is because the narrative that Bitcoin is the new gold does not understand what a big financial hedge is. Gold has been a safe haven in the modern world, with a limited supply that is used to resist traditional asset bubbles. A digital asset exists as an asset, but it is not gold — like an asset because of its scarcity and lack of value.

Bitcoin Will Eat Gold

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Written by Cryptowebci

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