Bitcoin is Back with a Vengeance, Calling Gold “Worthless”
With so much money sloshing around, courtesy of the Federal Reserve, prices are being bid up in stocks, real estate and even Bitcoin. With Bitcoin trading near its highs from several years ago, the marketers for this new “phantom money” are out in force on the financial news channels trying to sell investors on a $19,000 “coin” that really isn’t a coin but a line of computer code somewhere in the “cloud” up there.
There are now commercials running on CNBC that glorify Bitcoin as the “new gold.” They describe how gold is now “worthless” because investors can’t use it for anything. They say we can’t walk into a store and spend a silver or gold coin on anything, but Bitcoins can be transferred phone to phone for purchases. This is true, if your main purpose for holding a coin is to spend it – rather than to save it as an investment.
How could anyone call gold worthless when it is the only store of value that has held its value for many centuries – or millennia, in fact – and Bitcoin is only about 11 years old? The first gold jewelry in the world has now been discovered in Bulgaria, at Varna Necropolis, an ancient cemetery, c. 4200-4600 BC.
Here’s what I would say to Bitcoin fanatics: There are hundreds of cryptocurrencies and yet Bitcoin is the only one whose price is rising substantially. To me, that seems like a bubble. Why aren’t the others rising, too? Here’s something else to think about. Do you think the governments of this world want millions of their citizens to have a private, tax-free currency competing with their fiat paper currency? Do you think they will let Bitcoin go unregulated and untaxed forever? They could close Bitcoin down at any time; and the lack of any government supervision or regulation also makes Bitcoin subject to manipulation.
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