A fierce debate has been raging in investment circles: Is bitcoin a genuine contender to gold’s hegemony as the go-to store of value?
About two years ago, the Winklevoss twins quipped that bitcoin would one day become better at being gold than gold itself, adding that the only advantage the yellow metal has over BTC is a 3,000-year head-start. Have we arrived at this point yet?
The bitcoin camp has made its case: BTC has many attractive features that trounce gold’s including being mathematically scarce, harder to counterfeit, portable, transferrable and superior divisibility thus allowing micro-transactions (try buying a latte using a gold bar).
A peek at their recent price actions might convince you that bitcoin has even usurped gold’s role as the pre-eminent safe haven asset.
BTC price has spiked as trade tensions between Washington and Beijing have reached fever pitch yet bullion has hardly budged—up less than 1 percent over the past seven days.
But the gold camp now says not so fast. For many gold punters, cryptocurrencies stands zero chance of ever replacing gold. One such gold bug is CEO of Wheaton Precious Metals, Randy Smallwood. In a telephone interview with Kitco News, Smallwood, says that simple physics prove that cryptocurrencies will never replace gold.
His argument is straightforward, ‘‘The beauty of gold is that it’s a solid asset. It’s been around for a very long time and will continue to be around. The problem with cryptocurrencies is that the market is always changing and you constantly have to watch it.’’
But here comes the punchline, “All cryptocurrencies are virtual and therefore are replaceable. But there is only one type of gold.”
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