{"id":10920,"date":"2020-05-19T04:52:12","date_gmt":"2020-05-19T04:52:12","guid":{"rendered":"http:\/\/emilynews.com\/blog\/?p=10920"},"modified":"2020-05-19T04:52:13","modified_gmt":"2020-05-19T04:52:13","slug":"news-commentary-1062-writer-compares-bitcoin-to-gold","status":"publish","type":"post","link":"https:\/\/emilynews.com\/blog\/?p=10920","title":{"rendered":"News Commentary #1,062 – Writer Compares Bitcoin to Gold"},"content":{"rendered":"\n

Which is Better?<\/strong><\/p>\n\n\n\n

In a recent article by Jeffrey Gogo that appeared in Bitcoin dot com<\/em>, gold is compared to bitcoin as a safe haven for the conventional investor.\u00a0 Arguing in favor of bitcoin, he points out that, \u201cbeyond comparing favorably to some cryptocurrencies for its\u00a0classic money features such as scarcity (at 21 million coins), portability, and broad accessibility, bitcoin intrinsically improves on traditional assets.\u00a0Its\u00a0digital format, programmability, universality, and decentralization are\u00a0a source of\u00a0alternative appeal.\u201d\u00a0 He even goes on to say that bitcoin\u2019s volatility might be an asset.\u00a0 The article is certainly worth reading, especially if you are wedded to the idea that precious metals are the only type of \u201cmoney\u201d that has real value.\u00a0<\/p>\n\n\n\n

In case this tweaks your interest, I have reprinted the article below\u2026<\/p>\n\n\n\n

How Investors Are Presented with Bitcoin: ‘A New Decentralized Monetary Asset, Akin to Gold’<\/strong><\/p>

Bitcoin (BTC) is a compelling investment case \u201cfor patient, long-term investors\u201d willing to spend the time to understand the top cryptocurrency, a new paper by Paradigm co-founder managing partner Matt Huang notes.<\/p>

The crypto entrepreneur places\u00a0BTC\u00a0besides gold, as a go-to store of value, amid unprecedented stimulus spending by governments during the Covid-19 crisis.<\/p>

\u201cBitcoin is likely to earn a place alongside gold as a sensible part of many investment portfolios,\u201d\u00a0Huang\u00a0says in a\u00a0paper\u00a0aimed at reaching out to conventional\u00a0investors, \u201cBitcoin for the open-minded skeptic.\u201d<\/p>

\u201cIt combines the scarce, money-like nature of gold with the digital transferability of modern currency,\u201d he added.\u00a0At the peak\u00a0of the virtual currency\u2019s adoption\u00a0curve, \u201ccentral banks may come to view bitcoin as a complement to their existing gold holdings.\u201d<\/p>

Huang\u2019s paper is not so much premised on novel insights as it is about mapping a future out of\u00a0BTC\u2019s intrinsic features.<\/p>

Beyond comparing favorably to some cryptocurrencies for its\u00a0classic money features such as scarcity (at 21 million coins), portability, and broad accessibility, bitcoin intrinsically improves on traditional assets.\u00a0Its\u00a0digital format, programmability, universality, and decentralization are\u00a0a source of\u00a0alternative appeal.<\/p>

Decentralization and immunity to censorship afford\u00a0BTC\u00a0holders \u201ca special kind of confidence: that bitcoin cannot be devalued by arbitrary monetary policy decisions, and that they will always be able to hold and transfer their bitcoin freely,\u201d Huang writes.<\/p>

This becomes especially important at a time when the markets are unusually exposed to politics, not just benign government interventions but also crisis-related protectionism and bilateral hostilities.<\/p>

A recurring objection to\u00a0BTC\u00a0as an asset class is that it is a bubble but Huang turns the same criticism\u00a0around\u00a0in favor of the crypto. Citing Nobel laureate Robert Shiller,\u00a0he\u00a0notes that\u00a0BTC\u00a0is in good company as gold is also a bubble, being an\u00a0asset class of no immediate utility\u00a0but rather\u00a0valuable for popular conviction about a future value that\u00a0occasionally pushes\u00a0the prices up.<\/p>

Bitcoin bubbles of note, 2011, 2013, 2013-15, and 2017 began with high-conviction investors buying when things were quiet on the front, followed by media attention, speculation, further attention, and investor interest.<\/p>

\u201cAlthough painful for those involved, each bubble leads to broader awareness and motivates bitcoin\u2019s underlying adoption, gradually expanding the base of long-term holders who believe in bitcoin\u2019s potential as a future store of value,\u201d Huang explains.<\/p>

\u201cThrough successive bubbles, bitcoin reaches greater levels of scale in users, transaction volumes, network security, and other fundamental metrics,\u201d he argues.<\/p>

Bitcoin\u2019s\u00a0relative ease of access through in-built financial inclusion mechanisms will be useful in growing its market size as people with eroding currencies are more likely to get the digital asset than they are to get gold or other valuables\u00a0like art or property.<\/p>

Political considerations may also work in the cryptocurrency\u2019s favor. \u201cIf foreign governments (some of whom already bristle at their dependence on US dollar forex reserves) begin to adopt bitcoin as a complement to existing gold holdings, the market size for bitcoin could expand significantly,\u201d Huang adds without committing to a precise estimate.<\/p>

Huang\u00a0contrasts\u00a0the general optimism of his paper with\u00a0BTC\u00a0risks such as volatility and regulation. Volatility, however, aids adoption and may terminate when broad acceptance lead to stability, while regulation can\u00a0be mitigated by bitcoin\u2019s decentralized nature.<\/p><\/blockquote>\n\n\n

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Which is Better? In a recent article by Jeffrey Gogo that appeared in Bitcoin dot com, gold is compared to bitcoin as a safe haven for the conventional investor.\u00a0 Arguing in favor of bitcoin, he … News Commentary #1,062 – Writer Compares Bitcoin to Gold<\/span>Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":9422,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[139,3545,3544,3546,3547,4207,4208,4209,4210,3611],"class_list":["post-10920","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-information","tag-bitcoin","tag-bitcoin-info","tag-bitcoin-news","tag-bitcoin-update","tag-bitcoin-updates","tag-bitcoin-vs-gold","tag-btc-and-gold","tag-btc-gold-standard","tag-crypto-gold","tag-crypto-news","exalt-entry"],"yoast_head":"\nNews Commentary #1,062 - Writer Compares Bitcoin to Gold - EmilyNews<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/emilynews.com\/blog\/?p=10920\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"News Commentary #1,062 - Writer Compares Bitcoin to Gold - EmilyNews\" \/>\n<meta property=\"og:description\" content=\"Which is Better? 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