Gold Vs Bitcoin… Why bitcoin wins.
In the last few days, we saw a descending triangle breakdown which was almost immediately bought, moving price back above the breakdown point. On the daily chart this printed a reversal candle. Buying appears strong below 600. The chart formation looks bullish to me.
The volume on the upside isn't quite as strong as the downside volume was, which is a bit of a cautionary note, but it does seem like the big selling is done for the moment.
LOL I like it!
I take your point about no real free market, but given the outright manipulations by central banks on everything including the price of money, I still maintain that Bitcoin at the moment is a 'freer market'. The recent parabolic move was put down to the Chinese getting in after a couple of documentaries on Bitcoin. By this I mean the Chinese people,not the government.
I still don't think Bitcoin is in a bubble,it is a currency and should be used as such. For the record I own 0.5 BTC, I also own some Gold & Silver. People shouldn't invest in a currency for gain but as a means of exchange for goods and services which is where digital currencies come into their own.
I get all the references to the dot.com this time it's different- it never is! But as a means of exchange I think Bitcoin has a future. Only time will tell..
Hi Troof- We live in the age of exponentials and bubbles. Bonds/debt, stocks, population, extraction/production/consumption of anything and everything, real estate. MSM and CNBC claiming hard that gold is in bubble (not yet) and TPTB working hard to make it look that way. But one day gold will be in a bubble and the whole point is to get in and out and transfer your wealth/energy into asset class that is undervalued, something like real estate/land if you time it right. Right now bitcoin is a great NEW monetary opportunity that im betting has a lot further to go before it pops. Maybe some buy and hold pm's simply to trade for goods and services in future? That doesn't make sense…. I might do that for silver, but my gold I completely expect to go more parabolic and I WILL get out of gold at some point to transfer wealth into preps i need (undervalued LAND!). So understand that bitcoin is a brand new avenue to let wealth/energy accumulate and transfer at appropriate time to another asset class that is undervalued….to store wealth. I have read many comments about those who hold pm's to simply barter with in the future and maybe a new thread would be interesting to find out what exactly do folks here expect to do with their PM's in the future. Bitcoin is another NEW opportunity to accumulate wealth. I seriously think that western central banks have little gold in storage, that is why they need to slam it down. They cant even give Germany their gold back for seven years, another reason to take it down as low as they can. I can just see Central Planners deciding to go with a digital backed currency before gold backed currency because gold is moving west to east, we dont have the MOST gold anymore to back a currency! "Hey guess what everybody-we are adopting this incredible new technology to back our currency because 'the times they are a changin'. In the meantime we'll accept both till said date to transfer completey to new currency. Sorry folks for the inconvenience but digital currency is the future-we cant stop progress!." WATCH..THEY will do whatever it takes to prevent gold from prevailing because our gold is GONE…baby gone.
You know, one of the most profound realizations that hit me hard when I swallowed the blue pill was understanding that the only reason I exist and walk this planet was because of a BUBBLE. So bring on the tulips. We are all unique, rare, beautiful tulips that are worth something….TROOF
I dont even know my matrix pill colors-I meant RED pill…TROOF
Bitcoin transaction volume for purchases is flat or decreasing yet the value of a bitcoin in $'s goes up, up, and away. That the FED is NOT bad mouthing the bitcoin tells me the Powers That Be don't care about it or are about to crash it. Whenever I see the initial exponential curve I have to say to myself "what foolishness is going on?". Gold had this behavior too before its recent pull back. For awhile there this website was heavily promoting gold but not much said now. One would think the "fire sale for gold" message would be bigger here now. That it isn't and bitcoin skyrockets has me wondering what is going on. Is this another sign of a big crash as the herd gets quiet before the storm?
"bitcoin has no intrinsic value"
"what gives gold value is that it has intrinsic value on its own"
"these people who own bitcoins, their judgement is being clouded by the money"
"there is a bubble in bitcoins, people want to get in on it"
"..a lot of the people who got into bitcoins … certainly have a vested interest in trying to expand the market, to talk the market up."
"when the [bitcoin] market turns, look out below"
"in the meantime, if you are really looking for a true store of value, if you dont want to be in government fiat money, if you want to be in real money that can't be created at will, can't be inflated away, BUY GOLD."
This all said in front of a Europacific Precious Metals logo. Peter also has a vested interest. Are we about to see a whole lot more public education (marketing) by the gold lobby yet to come at bitcoin?
I generally admire Peter Schiffs work. But is this presentation just borne from frustration at the decline in price action in pm's? It comes across to me as a marketing exercise pitched at potential bitcoin investors.
Are still having trouble digesting the Bitcoin phenomenon. Many Gold advocates fall into this either/or trap I think. I really enjoyed listening to this Max Keiser episode yesterday… the guest is in the VC space and talked about where Bitcoin is today, and where it might be going… he strikes me as very level headed, pointing out that it is possible that an investment in Bitcoin today could go to zero… and it can. I don't think it will though.. Bitcoin is a worldwide phenomenon.. and the dollar (and the US financial authorities by extension) is in the process of losing it's dominance. Anyway, the guy forced us to think about Bitcoin as a market capitalization (currently about $10B https://blockchain.info/charts/market-cap ) and compare this to other entities in the financial universe (Goog has a market cap of $347B) and this helps us keep things in perspective… the real "problem" if you will, in my opinion, is what I wrote about in my thread, "The unbearable lightness of Bitcoin, aka deflation", is the price of Bitcoin… it keeps going up in dollar terms! Gotta be a bubble, right? The exchange value of Bitcoin will have it's brief speculative excesses for sure.. this is human nature.. but the phenomenon is not going to die.. it is too inventive.. too useful, too refreshing in the face of the abuse we the people have taken from the monetary authorities over the years;
Andy Hoffman of Miles Franklin is one of those commentators who has been ever so slowly coming around to see some of what Bitcoin is and has to offer, but he still is unable to get out from under his pre-conceived notions .. but I know where he is coming from in a way, since I hate the money cartel as much as he does, and I hate what they are doing to Silver/Gold as much as he does.
What Armstrong fails to address is the fact gold and silver have always been money; not to mention, that Bitcoin, while “convenient,” would take decades, if not centuries, to establish a track record. When one reads of this year’s record physical gold demand – principally, from the soon-to-be undisputed Superpower China – it’s frankly, ludicrous to state otherwise. Not to mention, insinuating silver prices have fallen to multi-year lows – entirely during U.S. trading hours – due to anything other than manipulation, when considering this year’s record U.S. Mint Silver Eagle sales. Yes, the mint sold more silver Eagles in the first nine months of 2013 than all of 2011, when prices hit $50/oz. and a so-called “bubble” was forming. And yet, we’re told silver is in a “bear market” – as worldwide money printing accelerates at its highest-ever level.
Here Andy is alluding to the thousands of years history of Gold and Silver as money. Given the internet and the speed of communication today, his statement above is a gross exaggeration.. Bitcoin is taking the world by storm because it is the right invention at the right time… there are very few barriers to adoption, other than a slight technical learning curve. He goes on to say;
No matter how things evolve, 5,000 years of monetary history won’t suddenly be erased by a new form of fiat currency; which, by the way, is exactly what Bitcoin is. To believe Bitcoin’s masters will never allow supply expansion is pure folly; in my view, no different than what was agreed in 1944’s Bretton Woods Conference. Moreover, bigger, smarter computers will surely enable increased rates of production, at cheaper costs; yielding a rapid technological evolution involving more complex virtual currency algorithms and faster computers. But in the end, it’s still fiat currency – until proven otherwise.
And this is where Andy really goes off the rails….
A. Bitcoin does not have any one master.. it is by nature distributed.. and this is part of it's beauty and elegance. There is a non-profit .org that exists to help herd the cats, the cats in this case being the active miners and miner nodes (groups of miners that work together) who are the lifeblood of Bitcoin.. but this .org does not have the power to go in a change the underlying source code to allow for a higher rate of Bitcoin production. This is open source software like Linux.. meaning that all the players.. all the hacker programmers.. can see the source code and alert the world if something of importance like this were to "infect" Bitcoin's digital DNA. Andy is wrong.. he does not understand open source software and the idealistic enforcement capacity of the techie community.. as smart as he is, he just doesn't get this. After 30 years in semiconductors, seeing the Linux revolution happen, I do, and many of us here do as well. Bitcoin is the Linux of money… whereas the dollar is the Windows 7 of money.. with a big powerful cartel behind it that wants to keep you in it's ecosystem and get it's vig from you along the way.
B. Bitcoin is not, I repeat NOT, fiat currency. It really galls me when someone of Andy's intelligence says this. This is really, really important to understand in my opinion.
Fiat moneyFrom Wikipedia, the free encyclopedia
Fiat money has been defined variously as:
- any money declared by a government to be legal tender.
- state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.
- money without intrinsic value.
Bitcoin is decentralized… there is no government involved that forces it upon us as money. It lives or dies as a phenomenon based on it's usefulness and desirability as an asset. Nobody has to use it. There is no violence behind it.. no taxes to be paid in it. Maybe Andy is pointing to the intrinsic value argument.. but even there… Bitcoin is software. We place value on software based on its usefulness. We buy app's all the time on our phones, and some of us pay a pretty penny to get specialized software to create music, or photoshopped images, etc. If you think of Bitcoin as revolutionary software.. a payment system that encompasses the store-of-value function.. then you start to see that it does not lack intrinsic value.
As far as what percentage of my net worth I am willing to invest, Gold and Silver are by far more important to me. Bitcoin can go to zero.. and Gold and Silver never will. That being said, there is really no end in sight for how pervasive Bitcoin could become as a form of payment, and therefore how high, in dollar exchange value, 1.00 Bitcoins could go.
Based on your assessment of Bitcoin, hypothetically, with a medium risk tolerance, what percentage of your portfolio would you be willing to allocate to it right now, at this moment, if you:
1) were starting out and had no debts and had $10K to invest?
2) were along in your accumulation of wealth with no debts and had $100K to invest?
3) were nearing retirement with no debts and had $1M to invest?
Thanks for your thoughts on this matter.
Troof, My only investment advice to folks is this; If you have savings, it is imperative that you learn enough about the nature of currency (fiat and other), money (Gold and Silver), and other investments to become at least somewhat self-directed. One of Chris' early aphorisms was to, "trust yourself". It is self-obvious that one cannot get to that point of trusting one's self without educating one's self. I act as a commentator here in order to pass along that which I have learned myself in a decade of intense study, kicked off when the Corporation I work for told me that I had just missed the cut, and that my traditional pension plan was getting switched over to a lump sum that I would have to manage, or have managed for me.
I personally would not put more than a few % of my net worth into Bitcoin.. I am much more interested in Bitcoin based on what it says about the people's hunger for alternatives to fiat money.. and I view Bitcoin's success as nothing but a positive harbinger of what is to come for PM investors as Gold overcomes the shackles of the fractionally reserved paper market structures of today.