BITCOIN
W
understand how well it fares during high inflationary periods, e.g., in the 1970s, gold shot from $35 to $850. And when the pandemic hit last year, gold had a big initial dip down, but then central banks and jewelers swooped in and bought big. And when it comes to bitcoin’s performance, Frank again highlights its fledgling status, claiming that a mere 10-year history isn’t enough time to determine how well it will do in the future. In his estimation, he doesn’t see why anybody would invest in bitcoin if their objective is to preserve value. SUPPLY (BLOCK)CHAINS The crypto kings will always make the scarcity argument that bitcoin’s capped at 21 million coins whereas humanity’s constantly stumbling upon more gold. But Frank wants to clarify the gold mining industry as he thinks most people (including Michael) don’t grasp it. The average period between discovery and production of the metal is 10 to 20 years. And the grades are getting lower, becoming more costly and time-consuming to find these lesser-quality deposits. According to Frank, no one’s made a world-class gold discovery in the last 30 years. And he illustrates how mining production does and doesn’t affect the price of gold. In 1971, the global production of gold by mining companies was 1,500 tons, and gold was $35 an ounce. Scroll forward 50 years: Gold’s price has shot up 50-fold , 6,000%. The uptick in
PEAKING PERFORMANCES When it comes to pitching bitcoin’s performance, Michael first decides to give an abbreviated history of gold. Two thousand years ago, gold represented nearly all of money – and it’s slid ever since. Today, the monetary value of gold is around $5 trillion, and the total store of value in the economy is $250 trillion, i.e., gold is roughly 2% of all money.
Imagine bitcoin as Lebron James. Making gold... Michael Jordan?
Michael claims gold peaked this past August 10 – not coincidentally around the time he and his company MicroStrategy announced they bought $250 million bitcoin. In his mind, if he had chosen gold at that moment, he’d be down billions today over nine months versus bitcoin – a $4 billion choice. And he believes he chose wisely. While he admits bitcoin’s first decade was legendarily volatile, he believes the asset has matured, and the network has spread. The crypto’s growing up! He likens it to Lebron James at age 19. The best player is always the most volatile. So yes, think of bitcoin as Lebron. Making gold... Jordan ? Frank responds strong, noting that to grasp the heights of gold’s performance, you must
22
May 2021
Made with FlippingBook - professional solution for displaying marketing and sales documents online