Two reasons why bitcoin will outrun gold as a safe haven

Gold’s recent rally is bullish for bitcoin                                                                                                                                                                                                                                                                                                                                                                                                                 September 06, 2024 | [Listen Online]( | [Read Online]( [Teeka Tiwari]( & Houston Molnar [fb]( [fb]( [fb]( [fb](mailto:?subject=Post%20from%20The%20Digital%20Asset%20Daily&body=Why%20Bitcoin%20Will%20Eventually%20Outrun%20Gold%20as%20a%20Safe%20Haven%3A%20Gold%E2%80%99s%20recent%20rally%20is%20bullish%20for%20bitcoin%0A%0Ahttps%3A%2F%2Ftiwariresearchgroup.com%2Fp%2Fbitcoin-will-eventually-outrun-gold-safe-haven) Why Bitcoin Will Eventually Outrun Gold as a Safe Haven The most popular item in Korean convenience stores might surprise you. It isn’t magazines, beverages, or ramen… It’s gold. Inside South Korea’s largest convenience store chain, CU, you’ll find vending machines that sell one-gram gold bars for about $80. The chain installed the machines in April. Within days, the bars sold out. Source: Maeil Business Newspaper Demand for gold bars and coins in South Korea is up 27% over the past year. And last quarter, the country saw its sharpest increase in gold purchases in more than two years. This surge in demand has prompted other South Korean convenience stores to follow CU and roll out their own gold vending machines. Here’s why I’m sharing this story with you… The post-pandemic inflation surge has driven people worldwide to search for ways to protect their wealth. Naturally, they turn to the asset that’s done this well for thousands of years: Gold. Right now, gold is all the rage as it hits new all-time highs month after month. Meanwhile, bitcoin is down 22% from its all-time high set in March this year… And just continues to chop sideways. If you read crypto Twitter, Reddit forums, or the mainstream financial press, it seems like everyone is ready to throw in the towel on bitcoin. This week, the bearish headlines started hitting the press again... On Monday, CNBC posted a headline, “Beware of a bitcoin backslide to $50,000 as it enters historically worst month of the year.” The next day, Forbes screamed, “‘Strap In’— Serious $40,000 Bitcoin Price Crash Warning Issued As The Fed Suddenly Braces For A U.S. Dollar ‘Crisis’ That’s Predicted To Spark ‘Total Collapse.’” These pundits see gold making new all-time highs and are ready to jump on the bandwagon. But what they don’t know is that gold’s recent rally is a bullish sign for crypto investors – even if you don’t own any of the yellow metal. Inflation Pushes Gold and “Digital” Gold Higher Like Americans, Koreans have experienced some of the highest inflation in a generation. After a decade of roughly 1% inflation, the country’s inflation rate spiked to 6.3% in 2022. By comparison, the United States averaged roughly 2% inflation over the past 30 years. After the pandemic, inflation spiked to 9.1% in 2022. Koreans aren’t the only ones stockpiling gold. Retail giant Costco started selling one-ounce gold in the United States earlier this year. They sold out within hours. Demand was so huge, Costco put a strict limit of two bars per customer. Banking giant Wells Fargo estimates Costco could be selling as much as $200 million in gold bars per month. It’s not just Americans and Koreans feeling the gut punch of higher prices following the pandemic and the resulting shutdowns. On average, global inflation jumped from 3.2% in 2020 to almost 9% in 2022, according to Statista. Historically, the yellow metal has served as a store of wealth. So it’s no wonder gold bars are selling like hotcakes as people rush to protect their purchasing power. From its 2021 lows, gold is up roughly 49% priced in U.S. dollars. And it’s up 77% over the same period when priced in the South Korean won. Bitcoin skeptics point to the rally as evidence that gold is superior to bitcoin as a store of value. There’s no way an asset that can drop 20% in a single day can protect your wealth, they argue. Look, I get it. Bitcoin is highly volatile. But the naysayers are missing the forest for the trees. Bitcoin hasn’t even hit its 20th birthday yet. Meanwhile, gold has been a store of value for over 2,000 years. So higher volatility should come as no surprise to anyone. Yet, bitcoin is up 1,434% since the pandemic lows. Gold is up just 49%. Of course, skeptics might counter that bitcoin is similar to a high-flying tech stock like Nvidia or Facebook. It’s just a flash in the pan. They couldn’t be more wrong. In fact, we believe bitcoin will actually overtake gold as the go-to store of value in the future. Hear me out… The world is becoming exponentially more digital. From the internet to artificial intelligence, nearly everything we do in modern society is done online or wirelessly. The money you spend… The concert tickets you buy… Even your health insurance cards. They’re all digital now. According to Fortune, the average American spends roughly seven hours online each day. This trend will only increase with younger generations. Millennials and Gen Z are the first generations to be born into a completely online world. And they overwhelmingly prefer digital assets to gold. A survey by DeVere Group, an independent financial advisory firm, found that more than two-thirds of Millennials prefer bitcoin over gold as a safe-haven asset. Just think about it… Bitcoin is digital. So it’s easier to transport and use. You can walk through an airport with over $1 billion in bitcoin on a small flash drive. Try doing that with gold or even cash and see how far you make it. And that’s your own money. When you want to spend your bitcoin, there are plenty of services that’ll instantly convert your bitcoin to a local fiat currency. On top of this, bitcoin is much more transparent. We know exactly how many tokens will enter circulation each year. And we know the maximum supply of coins will cap at 21 million. With gold, it’s impossible to know how much is mined each year. Nor do we know how much gold is underground or in circulation today. Here’s the bottom line: Gold and bitcoin function similarly and offer many of the same benefits. Bitcoin is equally scarce, durable, and private as gold. But it’s more easily stored, transported, and exchanged than gold. That makes gold the horse… and bitcoin the car. And that’s why it’ll be the store of the value of the future. Bitcoin Adoption Is a Marathon – Not a Sprint As I wrote in last week’s Digital Asset Daily, [we’re about to see the greatest wealth transfer in history over the next 20 years.]( That’s when older generations will pass down $84 trillion in wealth to younger generations. But the younger generations don’t manage their wealth like their parents do. They’re investing 14% of their wealth in digital assets compared to the 1% their parents were. Whether we like it or not, younger generations grew up in the digital age and are far more comfortable with digital assets than their parents. So it’s a no-brainer they’ll store a great deal of that $84 trillion in inherited wealth in digital assets. And bitcoin is the “digital” version of gold. As Teeka says, the story of bitcoin is one of mass adoption. And we’re still early in the trend. According to Crypto.com, over 219 million people have owned some bitcoin since the token launched in 2009. That may seem like a lot of people. But there are 8 billion people on the planet. So the number of bitcoin owners makes up only 2.7% of the world’s population. And when you look at bitcoin ownership here in the U.S., only 7% of Americans hold crypto according to CNN. That’s tiny compared to the roughly 62% of Americans who own stocks. Boston Consulting Group estimates the number of bitcoin holders will grow to 1 billion by 2030. That’d be a nearly 5x increase in the number of bitcoin users from today. Now, let’s say only half of that projected 1 billion new bitcoiners actually do buy bitcoin. And let’s also assume they only buy $1,000 worth of BTC each. That’s a small allocation, considering the average net worth of Millennials is $549,600. If so, we’d see $390.5 billion in buying pressure from 781 million new users (1 billion minus the existing 219 million users). That’s nearly 34% of bitcoin's $1.1 trillion market cap. Any asset that sees 34% of its value in buy pressure would gun higher. But bitcoin will go even higher since such few tokens are in the hands of willing sellers. You see, 66% of all bitcoins have not moved in over a year, according to Glassnode, a blockchain analytics platform. These coins are either lost forever or in strong hands, reluctant to sell, even if prices climb higher. In fact, only 2.62 million of the 19.75 million tokens in existence are held on major exchanges. The rest are locked away in cold storage wallets, outside of circulation. This is why the price of bitcoin can move quickly over a short time. There’s a limited number of tokens for sale. The key takeaway is this: Bitcoin is volatile – both to the upside and downside – while it’s still in its infancy compared to gold. But that volatility will diminish as the asset matures. So ignore the naysayers who say bitcoin isn’t a store of value because while bitcoin is volatile, there’s no other asset in the world that has protected your buying power the way bitcoin has. Think about this… Even if you were unlucky enough to buy bitcoin at its absolute peak every year since 2009, you’ve always been profitable within four years. By the time the mainstream awakens to the narrative, bitcoin’s price will be multiples higher than where it is today. So when you see gold running higher and bitcoin taking a breather after a 347% run since the start of 2023… don’t fret. As governments continue to erode our purchasing power, gold will go higher. But bitcoin will go much, much higher. It won’t be in a straight line. But if you can ride out the volatility, we believe the financial gains will be life-changing. This is a marathon. Not a sprint. And bitcoin will eventually be the winner of the race. Regards, Houston Molnar Share The Digital Asset Daily You currently have 0 referrals. 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