Gold 1, Bitcoin 0 | Kitco News

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Coinbase, a publicly traded cryptocurrency company, recently announced that it would sell 1.5 billion bonds (then revised it to 2 billion). Dollars. A leader in the crypto revolution borrows dollars.

Without any awareness of the irony, crypto promoters say it validates crypto. That a crypto firm borrowed dollars supposedly validates the crypto.

Think about it, take the time you need.

I have been saying for over four years that bitcoin is not suitable for borrowing. And now the crypto barometer shows that they agree!

Bitcoin is not suitable for borrowing

If someone could borrow bitcoin, a company that manages large amounts of it for a large number of passionate investors surely would. They chose not to. As any bitcoin enthusiast can tell you, it would be foolish to borrow bitcoin because the cryptocurrency is expected to reach multiple multiples of its current price. Better to borrow dollars, which should go down.

To be more precise, anything that goes up or down quickly will have volatility. This is because the dramatic price action attracts speculators, who bet (with leverage) and extend the movement. Then it comes back, and they hit their stop-loss orders, and sometimes reverse their positions.

A borrower needs stability, not drama. Bitcoin provides a lot of the latter, but not so much of the former. Bitcoin is not suitable for borrowing.

Is Bitcoin “digital gold?” “

Bitcoin is often referred to as “digital gold”. Well, here’s a difference. Gold can be used to finance productive businesses.

Not only can it be used to fund. It is used to finance. My company, Monetary Metals, recently announced the maturity and repayment of the first gold bond since President Roosevelt destroyed the gold bond market in 1933. We will be issuing many more gold bonds (and renting from gold which also earns interest to investors since 2016).

The photo below is an example of the certificates investors received for investing in the Gold Bond. The certificates were printed on a special 24k gold film made by Valaurum Inc., a company to which we lease gold (investors earn 2.25% interest in gold in this lease).

Is Bitcoin Better Than Gold?

It is obviously better at soaring (and also crashing). Much better. But price appreciation is only a way for sellers to get buyers’ capital. You see, when you buy, you are passing your hard earned savings back to the seller. He can spend part of it because it is his winnings. You do this, of course, in the hope that the next guy will hand over some more of his savings to you.

All the profits from trading bitcoin come from someone’s accumulated wealth.

But gold can finance productive businesses. Gold can allow companies that make real things in the real world to buy equipment and pay the expenses to start or increase production.

This is why the next monetary standard will be gold, not bitcoin.

Additional Resources:

See our Bitcoin research section: Postmodern Money

Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. This is not a solicitation to trade in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for any loss and / or damage resulting from the use of this publication.

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