BITCOIN
volatile with no history. Yes, the crypto went through (and benefited) from the COVID- induced market dip last year, but as an asset, it’s never been through the stress test of staggering inflation or a proper financial crisis. The 17th century Dutch Tulip Bubble, the Crash of 1929, late 1970s inflation, Black Monday of 1987, the Tech Bust of 2000, the Recession of 2008 – gold has always been there. The metal thrives in turbulent markets, and gold’s doubled since the last crash 13 years ago. " Central banks go by the golden rule: they own the gold, they make the rule . " FRANK GIUSTRA Both men seemed to fall in line with generational-conflict tropes in their discussion – framing the new player as “inexperienced” while claiming the older one lacks vision. THE RULES OF RISK Swaths of investors hesitate on bitcoin due to its volatility, and when it comes to risk between the two assets, Frank doesn’t even think it’s close. He believes viewing bitcoin as a risk-free asset is naive at best... If you fail to subsume the entire value of gold, you’re left with nothing. From Frank...
The crypto army tries to weave a narrative for a higher bitcoin price, convincing everyone that gold is worthless, seeking to seep all $12 trillion of the metal’s value into the crypto. In that way, you can justify a $500,000 bitcoin price or a $1 million bitcoin price. Otherwise, why would anybody pay $60,000 today without that target in mind? Frank knows the real dangers angled at cryptos will come from governments and central banks. History shows that sovereign countries will go to militant lengths to protect their monopoly on currency, and in his mind, they will not tolerate a decentralized global currency. “Central banks go by the golden rule. They own the gold – they make the rule . They have $7 trillion worth of gold. They’re not about to allow bitcoin to take that over.” They especially won’t tolerate it if we have a dollar crisis, which appears more of a reality each day. Unlike gold, bitcoin is a potential threat to the U.S. dollar and America’s reign of having the world’s reserve currency. And he thinks if enough people on Capitol Hill share this idea, legislation could arise that bans bitcoin, pushing the crypto back underground. Frank also cites that if (when) war breaks out, gold’s the far safer option. It’s secure from cyberattacks on both the Internet and power grids, either of which would thwart bitcoin. He also thinks the crypto isn’t as un-hackable as all its disciples claim it is...
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May 2021
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