Topic: Bitcoin vs. Gold - is market cap parity utopian? (Spoiler, no!) (Read 1100 times)

I found references here:



And here:
National Raisin ReserveWhere it actually states:

So yeah, this one is no longer enacted since 2015.

Anyway, market impact can be minimised in other ways.
Micheal Saylor has been quite effective lately.

If I am not mistaken, the times for "raisins" and "cheese" reserves are over, but I get the point.

I was rather referring to the idea that the US government would have to publicly announce it, thereby driving the price up. If they then simultaneously announce that proceeds from gold reserves would be used, then they would send down the gold price although their relative holdings aren't that significant on a global scale, but they would still trigger some negative feedback from the market I guess. Then they would send the price of their gold reserves down (mb temporarily only) and buy bitcoin at higher prices than if they hadn't announced anything.

This is why I wonder whether this strategy would have to be made public or go through congress such that the public will inevitably find out about it. Whether this would ultimately harm the taxpayer is more difficult than just saying that they won't directly be affected. That might be true, but they could still be affected second-degree so to say. If a certain level of reserves has to be maintained but a public announcement of a sale and acquisition plan (gold => bitcoin) would harm those reserve levels, than citizens are still somehow affected. Bit it is not the immediate money grab into their pockets of course.

The way the strategic Bitcoin reserve is going to be implemented is one of those, but it is not surely the only way.
I have doubts about the taxpayer's money, as one way of doing this would be using proceeds from gold selling, so taxpayer money is neutral.
The other point is that currently, there are many strategic reserves: "raisins" and "cheese" included, so not a bid deal setting up another one.

What makes you doubt they will buy BTC when the talk about it is getting louder and everyone knows that this asset is of strategic importance? You could be right though that they won't buy any BTC because they already have. Every government around the world, no matter what form of government it is, whether dictatorship or democracy or any other, has realized that this is the one asset you can send around the world without censorship. Now that the Russian reserves got frozen, do you think they have been looking into BTC for a while? I think so.


Selling gold reserves is like knocking out t he supports for the floor you stand on if you decide to spend it on anything but not on another asset that is suitable as a reserve, maybe a superior reserve, itself. Shifting gold reserves into BTC reserves partially does not sound like a stupid plan to me. The guys who stick to their silver now think they should have better sold some silver to buy BTC. Saudi Aramco is worth less than BTC.

When you look at this website, I like how there is a national flag next to every asset class except for the natural resources. But this is not completely true because the only asset class that deserves to have no country flag next to it ever is BTC. All the natural resources are unequally distributed around the world with some countries owning the lion shares of any of those natural resources. You could argue the same for BTC, but it has some element to it that makes it far more decentralized and allows for other countries, if the conditions are good, to set up mining operations and earn BTC from fees. It's going to be interesting in the next two decades when energy generation becomes more versatile and cheaper and BTC most likely more relevant.

I am not sure how it will be done, but I am sure that its not going to hurt the taxpayer because they can't increase the tax suddenly for just this and then be done with it, they are already taxing people, so they will just fund it from something else.

Imagine if they ended up using military budgeting to just put it on bitcoin instead lol, that would have been awesome, the entire bitcoin market worths 2 trillion dollars, that's just US military budget for less than two years, and not like that is all used efficiently, American veterans are dying from sickness and not getting their pensions properly and they are not even making that much even after getting injured in wars, many veterans end up keep working because they are not paid well, the entire budget basically goes towards companies that makes guns, weapons, planes, etc etc, that's the budget for, so if they just stop getting new toys for two years, they could definitely afford to get as many bitcoins as they wish.

BTC might be the only thing that could possibly ever bail out the treasury debt from its spiral into the abyss.   They cant hope that people will be taxed and repay this, what else is there maybe the invention of free energy and the growth from AI is somehow captured, it takes fantasy levels of imagination to come up with a solution.
   I doubt they will buy BTC but they might, not arguing against it I just find it that unlikely as a mainstream prospect.


Gold has risen alot, its not mild to be dismissed especially.   There was a threat of sub 1000 pricing a while back but that was nonsense really and they sealed that path off by printing a third more dollars in an reaffirmation of super easy money.

  Selling gold reserves is like knocking out the supports for the floor you stand on.  The rise in gold is what backs the dollar really.
   Gold will vary by situation and currency you trade in but I was looking at near +40% in the last year just earlier, I dont even examine it too closely as I think the miners are cheaper but the metal itself has done well enough to justify itself.

Are decisions like these topics that have to be discussed in the Senate and that have to be made public? Something like building a Strategic Bitcoin Reserve sounds more important to me that just getting some asset out there that is nice to have. Now I know that in a sense tax payers money is involved, but wouldn't it eventually harm the tax payer if the US government actually announces the plan to acquire 800k bitcoin? That would be a big deal and that would probably push the price by a lot because other countries or governments would have to make a choice if such a public announcement is being made or otherwise they would finally miss a huge opportunity.

Whether it be governments, businesses or institutions, or retail investors, for all of them it would be stupid to wait until the US government is done with building their strategic reserve. Isn't it more likely that they have been acquiring for a while but left the public in the dark to not create too much FOMO to their own detriment?

I find this an interesting question. It would also send a signal as to how the US government values gold compared to bitcoin. As you said, it is a bet on the extreme undervaluation of bitcoin vs. gold. If they bring up specific plans which asset to sell off in order to then use the proceeds to buy gold, isn't there some intention behind that considering that states like Russia and China have been stocking up gold if I am not mistaken?

Although the news are confusing as different outlets came up with different reports. This is what Reuters said beginning of November


and then there is a number of outlets reporting the opposite, no stop in buying gold.

So would the US government give competitors or adversaries a chance of buying bitcoin themselves by announcing it publicly before they have completed their strategic plans?

Senator Cyntia Lummis is proposing the creation of a Strategic Bitcoin Reserve.
Apart from stashing the 200K Bitcoin the DOJ already owns, she would like to sell some gold to buy the remaining 800K.
In a sense, she's betting on the extreme undervaluation of Bitcoin vs Gold.
 

The investors who have lost interest in gold are mainly retail investors like us. Most of us are no longer interested in gold because it has become stable and no longer gives high returns. While we are the ones who want to get rich with our small capital, that is why we see bitcoin investors in the early years were mostly young people. But as bitcoin becomes more legitimate and bitcoin ETFs are approved, more people will invest in bitcoin, not just young people.

On the other hand, for large investors, gold will always be the top priority in their portfolio because what they care about more is safety and stability.

I also disagree when I say: bitcoin has surpassed gold's dominance, it will come but not now.

In his latest presentation at Cantor, Micheal Saylor stated that Bitcoin could get to 6.22 times the gold capitalisation by 2040.
Pretty aggressive stance to me, not only in terms of Market Cap, but in terms of time horizon.
Hopefully, he's right on this.
I don't want to post it here, as it would be an extreme cross post but it's not difficult to find it!

I do not agree with you that people are losing interest in gold because they learned about the existence of Bitcoin. Conservative investors still hold a very large share of their portfolios in gold and they consider Bitcoin a risky asset for investment, in fact, there are a lot of such investors around the world.

BlackRock began to change their opinion on this well, they repeatedly repeat in their interviews that Bitcoin can be considered a reliable asset, and the BlackRock Bitcoin ETF under the ticker IBIT has outpaced the gold ETF in terms of asset value and it should be taken into account that the price of gold has now been high since 1980. So I think that this should become a very indicative factor for all investors who previously doubted whether it is worth investing in Bitcoin or not. On the other hand, the price of Bitcoin is now too high to buy it, experienced investors understand this well and may well pay attention to Bitcoin, but start buying it in the bear market, when the general euphoria ends and the price starts to fall.

From my point of view for ease of reference, it is more than reasonable for many of us to start to refer to quantities of satoshis, since it is seeming more and more impractical for any normie newbies to be shooting to own a whole BTC, and sure there are some who can fairly easily get to such quantity of BTC, but it seems a bit elitist and even impractical to be considering that the targeting of getting to 1 BTC is actually reasonable and/or practical for an overwhelming majority of normies who might be contemplating getting into bitcoin.

Essentially, they are likely going to need to start to think in terms of practical goals, and even getting to 1 million satoshis may well be difficult for a lot of newbie normies, so they likely are going to need to figure out some realistic quantiles of bitcoin to attempt to target.. perhaps first getting to 100k satoshis and then working up in intervals of 100k satoshis until they get to 1 million satoshis.. and so yeah, just keep working at it.. within their means and within their timeline.. and surely many times if guys are new to bitcoin, it may well take them 4-10 years or longer just to establish a reasonable position in BTC, and I actually know a lot of people who I have recommended getting into bitcoin and investing $100 per week, and for some reason they believe that is too much for their budgets and/or their psychology, and so even last year, I was starting to proclaim that a person who is just starting in bitcoin and ONLY putting $100 per week into bitcoin, they may well never be able to reach a whole bitcoin at that rate of investment. and surely $100 per week is $5,200 per year and $52k after 10 years, and so anyone wanting to reach 1 BTC or more is likely going to need to aspire to investing more than $100 per week into bitcoin, even if they might not be able to invest $100 per week right now, they might be able to increase their investment amount into the future.

At the same time, I doubt it is necessary for anyone to be putting artificial and/or unreachable goals in front of them, so they should be getting into bitcoin, yet trying to figure out some reachable goals, so in the beginning maybe they shoot for 100k satoshis and then push towards 1 million satoshis and if they are learning about bitcoin, then surely they can adjust their goals to be more aggressive in the future, if they come to realize that it might be in their better interest to do so.  People come to bitcoin within their own timeline, and surely a lot of normal peeps are going to end up having to pay way more for their satoshis due to whatever ongoing dynamics we have in which it appears that more and more larger players are starting to bid up whatever supply that's currently available.

We cannot turn back the clock, and we have to figure out what we are going to do in regards to our bitcoin accumulation journey from now into the future, and sure if we already have enough BTC or more than enough BTC, then sure we are not in a bad place, yet I doubt that there are too many folks, even members of this forum, who are really in a position to say that they have enough BTC or more than enough BTC... yet if they have already been accumulating BTC, and they know to accumulate BTC, then they surely are in a better position than the no coiner or the low coiner who does not realize that he doesn't have enough.


Of course, so many folks wrongly conclude that they are too late to bitcoin, and surely if they continue to fail/refuse to act to get bitcoin, they are ONLY going to make their situation worse by continuing to believe such nonsense.  But hey, there is ONLY so much that any of us can do to help normies to help themselves in the departmenet of getting started in their bitcoin accumulating (stacking) journey sooner rather than later.


I am not exactly sure about your description Onyeeze, since it seems to me that the main point is that the longer that bitcoin is in existence, the more and more people are going to recognize it as the more superior asset for holding its value for the various reasons that it is the best of monies, so value is going to continue to gravitate into bitcoin from many and most assets/currencies that have a monetary premium, even if it takes a while (50-200 or more years) to play out... and yeah, we don't have to wait 50-200 years to see the ongoing appreciation of bitcoin's price as value continues to flow into it.  The longer that people wait to get bitcoin, the more it is going to cost them to get it, so some people recognize bitcoin's value sooner than others, and sometimes it is not even because the earlier arrivers are smarter. Sometimes it may just be a matter of being at the right place at the right time and realizing that it is a good idea to get some bitcoin in case it catches on.

calculating when bitcoin was introduced till date you will know that bitcoin price is being getting increased due to the awareness or people the way people have known gold it is the way people have known Bitcoin both of them is a digital currency and the gold exist before Bitcoin but now bitcoin has taken over the market of digital currency because of it awareness and the eight investment method it is because of the investment plan of Bitcoin that makes people to lose interest in gold as a store value and the invest in Bitcoin so that is why when you are saying that Bitcoin does not have a population or bitcoin is just a new digital currency I will not disagree with you but the thing is that bitcoin has dominated over gold and the other digital currencies

The bolded part is about as correct as it could get. This is what I was trying to convey with my OP. The pace at which the network has grown (or the value of it) is so impressive that it's impossible to understand someone arguing it couldn't grow beyond gold. Of course it can... It exactly can because it had this growth and the growth is proof that people all around the globe and institutions and all other actors started rushing in while gold went about 2x in the same time. Bitcoin will grow when the global economy grows, and bitcoin will probably grow when the economy shrinks for certain reasons. This doesn't mean gold won't be stable or has to decline in value as a consequence, but there are so many other asset classes that people are invested in and not very satisfied with nor confident in.

I think that this bull run very well confirms what we have been talking about anyway and bitcoin is at any time set up to go for 25% in a week and it will continue like that. Scarcity will kick in, companies like Microstrategy take bitcoin out of circulation at a large scale, more people will set their goals to achieve holdings of 1 BTC and then if it becomes more expensive they aim for 1 mBTC and so on and so forth, but more and more people understand that not owning bitcoin at all will be an expensive mistake.

As the network grows further now and protects more and more value, the chance that politicians act against it becomes very small. It's a question of lobbies at some point too.

I have read a headline a moment ago "is it too late to get into Bitcoin?". I have read this headline ever since I found out about bitcoin and I thought damn it, I should have documented all those headlines every single time because they keep coming at all price levels.

Enjoy the ride JJG!

You are very correct.
We all know Gold has been in existence for thousands of years and Bitcoin just came in and has just been in existence for about 16 years now and if we check how Bitcoin is growing and making wave we will know that Bitcoin will surely surpass Gold as time goes on in it's market cap.
A lot of people focus more on Bitcoin investment than Gold investment this days because they have seen Bitcoin will be more valuable in time to come some government of nation are even investing on Bitcoin.
A lot of things that will replaced Gold are coming up every day and as time goes on the worth of gold won't be this valuable than as it is now.

Fair enough.  Apparently, the humor (or the actual point that you were making) went over my head.

The comparison between Bitcoin and Gold while only considering the assets’ market capitalization is rather lame if I’m to be honest. This is because there are several other notable factors that are beyond mere market capitalization that we should also put into adequate consideration before making such comparisons, factors such as technological advancement, there are also regulatory environments and most importantly, adoption rates. We can’t conclude on which asset is better/best without first considering these other factors.

It’s true that when we only focus on gold’s market capitalization lead over Bitcoin, we’ll be doing nothing other than to undermine and possible also overlooking the tremendous potential and growth Bitcoin has shown by moving from $4b market capitalization to $1.5tr in less that 10 years which we know shows quite a significant growth.
Bitcoin is still relatively a new technology and there are still enough room for more technological innovations and advancements, I’m pretty sure in a few years, there’ll be no more reason for such a comparison because Bitcoin market cap will surpass Gold.

JJG, buddy, I was being sarcastic calling that post "genius"   It was exactly as you said: the opposite.

(going to answer your post in more detail later)

I have nothing wrong with anything in your post, including that my understanding that there can be many of us bringing out various similar points, and some guys present ideas more clearly and scientific than others, and it can take a long time for ideas to sink in, including it can take a lot of time to grapple with some of the deeper ideas, and people will also learn from different ways of the ideas being presented.

On the other hand, I did not consider your above statement from EarnOnVictor to be particularly genius-worthy, and I in fact found it to be the opposite, especially since he seemed to have had been poo pooing the amount of bitcoin's growth in the past year or so by proclaiming that gold grew by something like $8-9 trillion in one year and bitcoin is merely just touching upon being around a $1.5 trillion asset.   Any guys who find wisdom in that level of dumbness are likely going to have fun staying poor and deservingly so for failing to have any level of smartness if they consider gold's doubling (perhaps over 13 years, even though much of it took place last year) has much if any meaning for gold's ability to be able to hang on to its market cap lead over bitcoin. 

Even if we compare bitcoin from 2015 to now, we would see that bitcoin went from something like a $4 billion market cap to $1.5 trillion, so continuing to poo poo bitcoin merely because it is small relative to gold seems to be completely missing the picture, to the extent that such framings is not being purposefully misleading.

Even if bitcoin does not reach gold's market cap this cycle (which might not even be that low of probabilities), there seem to be pretty decent odds that bitcoin is going to have a market cap that is multiples higher than gold's within a couple of cycles, and the comment about gold growing $8-9 trillion and bitcoin remaining ONLY around $1.5 trillion-ish is going to look quite dumb and quite blind to the current opportunity that bitcoin still presents to a lot of no coiners and low coiners who still have either completely not gotten started accumulating bitcoin or they have purposefully chosen to whimpily invest in bitcoin.

Sure it is possible that gold will double or triple again in the next 1-4 years, and even with bitcoin we cannot really be sure how its cycles are going to play out, yet it seems that the odds would still be pretty great that bitcoin will be toying around with gold's market cap and potentially exceeding it this or the next cycle, and sure it could take a few cycles before bitcoin's bottom price (such as it's 200WMA) is solidly above gold's market cap, yet still even from those price points, bitcoin is likely to be continuing upwardly and getting to price points of multiples and magnitudes higher than gold based on bitcoin's relative greater value that is still being figured out in the market over the coming 10-20 years and probably longer, and during that time still I would be hating to be holding more than 10% gold as compared with what I would be holding in bitcoin, and surely  even 10% is likely way too much, except for those wanting (perhaps purposefully) to have fun staying poor.

JJG let me say this for the last time, I am ALL for those other models not valuing bitcoin against fiat currency. I am all for it and I read it with huge interest and I have been thinking a lot about these things myself. What gbianchi has done here goes far beyond what I could have done within an hour or even less and it is great and insightful what he has created. But my goal was to simply demonstrate the pace at which bitcoin approaches parity with gold's market cap. You could use pretty much any denominator to demonstrate that and to just demonstrate this one single aspect, the USD is the most appropriate denominator I guess.

Bitcoin vs. gold comparisons can be approached on a whole different level as gbianchi has done. But to me it seems that you guys have skipped that I have intended for this thread to be relatively simple. That is why I did the standardization to 21 billion ounces, which contains rounding errors to say the least as the total amount of gold in the world is not exactly know, but approximately and that is why the number worked.

As gbianchi says

This is of course correct and the term you choose hits the nail on the head: "monetary premium superiority of bitcoin". There is nothing we disagree about here.

So let me conclude with one of the geniuses I was trying to demonstrate the bitcoin within just 15 years has cut down the multiplier from over 5 million to low double digits. You could also turn it around and talk in fractions instead of a multiplier.