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This is why Gold is not a safe haven, but is Bitcoin?

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Russia’s central bank stopped buying gold. Forbes reported “The central bank selling only started to end in late 1999 with the signing of the Central Bank Gold Agreement, a deal also known as the Washington Agreement, which limited central banks to the collective selling of 400 tons of gold a year, plus a ceiling of 2000 tons over a five year period.”

The Washington Agreement ended in September of 2019 which opens doors for Russia to simplify the sale of gold on global platforms.

Some argue that Russia doesn’t see gold as an attractive reserve as it once saw it. However, this shift to stop buying gold and opening doors to sell it could be the result of oil prices crashing this quarter. 

Why would Russia sell gold instead of hoarding it more? There are speculations that many countries, including Russia, may be adding Bitcoin to their ‘reserves’.  

At the time of this writing, that remains a speculation. However, why would anyone want to use Bitcoin in place of gold as a safe haven?  

Here is our answer.

Is gold an appreciating asset? Refuting the idea of safe haven

For an asset to be ‘safe haven’, it has to have the following characteristics:

  • It has to hold the value stable over the years 
  • Ideally it should grow at least at the pace of inflation (otherwise, how is it different from shoving cash under a mattress if both lose value over the years to inflation?)
  • It should be easily liquidated in the time of emergency
  • It should have limited supply

Let’s look at each of these characteristics closely:

Stable value & Inflation

dollar inflationGold traded around $1900 per ounce in 2011, today it sells around $1657.  For anyone looking at simple dollar to dollar comparison, it might look as though gold has lost $243 or 13% of its value.  

Wrong.   

If you add inflation to our $1900 price from 2011, you needed $2180 to keep up with the inflation over the years.  That means, actual loss is $523 or 24%.  An asset cannot be a safe haven and still lose 24% of its value over the decade.  

In fact, if you had shoved your dollar bills under a mat they would have only lost 15% in value, much better than gold in maintaining value.  

Even at the current dire situation of the stock market, it is still way better than gold numbers. Dow Jones was around 11,000 and today it is around 24,000;  Even though stocks are more riskier in general, if one had put money in S&P 500 in 2011 at 1300 today it would have been worth 2800. Still much better than gold, in our opinion.

Comparing gold and bitcoin for the same period is somewhat ridiculous because bitcoin at top was $31 and today it is hovering around $8000. An increase of 258 times (or 25,800%).

Based on the data, gold has failed both stability and protection against inflation tests.

Liquidity – Can you easily sell your gold during a quarantine?

Can you carry your gold with you to another country?  What happens if your money is stolen while you are travelling in another country – can you access your physical gold that is somewhere else?  

Would you have been able to sell your gold during lock down?  Where? How easy is it?

selling goldIf gold is supposed to provide liquidity during the times of emergency and it is not easy to convert that to ‘usable’ currency, what good of a safe haven is it?

With Bitcoin, in many cases you don’t have to sell it. You can directly buy/sell in exchange for Bitcoin. If you do have to sell it, it’s relatively easy to do it from the comfort of your home or from your smartphone.

On the count of liquidity, in our opinion, gold fails miserably.

Is gold really rare? Bitcoin is

In theory, about 2% of existing supply in gold is produced each year. Look at the below, gold is not as rare as people might think. It is still one of the more difficult metals to mine, but it may not be rarest.

bitcoin vs gold

Source: Wikipedia

Now look at the Bitcoin supply.

bitcoin vs gold

Source: Wikipedia

Bitcoin is not only limited and rare, it also goes down in supply each year and at some point in future – no more new bitcoin will be mined. And add to the millions of bitcoin that may never be accessible due to lost private keys and all.  

Bitcoin is truly rare.

It’s all or nothing game for both Bitcoin

is bitcoin safe?Why is gold considered so valuable. It is not the rarest metal, it is not the most useful,” wrote Guardian. The reason gold is so ‘precious’ is, according to the Guardian article, because “it’s quite hard to find and extract in large quantities with pre-industrial technology.”

In theory, someone can come up with a new technology that makes detection and extraction of gold so easy that gold might lose its value.

Those who thought Aluminum was the rarest metal on the planet were fooled once. In fact, the quizlet has a question on this metal:

“Q: Why was aluminum so precious in the mid-1800s?

A:  It was difficult to get pure aluminum from bauxite.”

Can we guarantee that we cannot figure out how to mine gold more efficiently with robots in future?

Bitcoin faces similar predicament, in theory, with quantum computers and better technology replacing it altogether.  At the same time, the technology is being upgraded each day – so it could evolve much better than it is today and even be quantum computer resistant. 

For this reason, we could say both gold and bitcoin face similar existential issues, however, with bitcoin the risk-reward is just uncanny.

Conclusion

In our opinion, gold as a safe haven is a somewhat antiquated idea. If we were to look at the data pertaining to gold from the last 10 years (we think this is fair when comparing it with bitcoin), we can see that people would have been better off investing in a much riskier stock market than gold.

In the coming years (next 2-4 years), we expect gold to go on a rally. It may not surpass the stock market performance or bitcoin but it might surpass the inflation race, making it a much better asset than fiat, but it may not hold its own against stocks or bitcoin, in our view. 

If you have been following us, you know that we are not big fans of fiat or stocks, but we are fans of gold and bitcoin.  However, based on the historical data and where each of these assets are heading – we are bigger fans of bitcoin.

In our opinion, Bitcoin passes every aspect of the safe haven test.

Thank you for reading and sharing this article. Stay safe and healthy!

Also read:
-Raoul Pal predicts $1 Million per Bitcoin and says “[Gold & Bitcoin] are going to save us”

-“Bitcoin is Gold 2.0” says this millionaire who is buying $150,000 per month in Bitcoin and Ethereum

Top 10 reasons why Bitcoin is better than gold

IMPORTANT DISCLAIMER

We have used referral codes where available.

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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Crypto Roundup: All Your YouTube Influencers in One Place

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Crypto Roundup

Visit our Crypto Roundup section daily for a dose of all your favorite Crypto YouTube influencers in one place.    

Worried about missing updates from your favorite YouTube crypto influencers?  

Welcome to the Crypto Roundup.  

On this page, we will post a quick summary of the videos from some of the most popular YouTube crypto influencers.

Ivan on Tech  Altcoin Daily

Crypto Zombie Box Mining

Ellio Trades Lark Davis

Data Dash Bitboy Crypto

MMCrypto Chico Crypto

Altcoin Daily

Video title: Bitcoin Will Be OVER $20,000 By Christmas 2020! BIGGEST WEALTH SHIFT OF OUR LIFETIME! Cryptocurrency

Date: 19-Nov-20

  • World’s biggest wealth shift of our lifetime is happening right now and no mainstream media is talking about it, except CNBC.

  • Preston Pysh predicted on August 26th that: “Bitcoin should be reaching its all time high by Christmas.”

  • If you are looking to buy a dip, there may not be one.
  • Ricardo Salinas Pliego, a mexican billionaire, has just revealed that 10% of his liquid assets are into bitcoin.

Lark Davis

Video Title: STOCKS HIT NEW HIGHS! WILL COVID VACCINES LEAD TO MEGA PUMP IN 2021? [Are You Ready?]

Date: 19-Nov-2020

  • Stock markets and bitcoin pumps higher on the news of the second successful covid vaccine.
  • There could be more chances for the new stimulus. Means more inflation, more debt and simultaneously pumps stocks, gold and bitcoin.

Crypto Zombie

Video Title: BITCOIN $18.5k TOP!!?! DON’T BE FOOLED!! HODL FOMO BEGINS!!! $TRILLIONS FLOOD!!

Date: 18-Nov-2020

  • Overall sentiment of Bitcoin has changed drastically from ICO craze in 2017 to a time where people are FOMOing to own more bitcoin.

Ivan on tech 

Video Title: BIG WARNING TO ALL HODLERS!!!!!!!!! DO NOT GET REKT!!! BITCOIN $18,500 REJECTED – NOW WHAT?

Date: 18-Nov-2020

  • Ivan expects bitcoin to shoot past $20K resistance before end of this year, giving it 85% probability

Chico Crypto

Video Title: World’s Most Powerful Turn BULLISH on BITCOIN

Date: 19-Nov-2020

  • All those who hold big bags of Bitcoin will come out of the shadows to talk up the Bitcoin rally, a $20K bitcoin could be on the cards before the end of this year
  • Ethereum mining could act as a big catalyst for Ethereum’s price
  • Big companies like google could play a bigger role in mass adoption of crypto

Let the FOMO begin…

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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Lessons from the Veteran HODLERS to the Newbies!

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Lessons in Crypto

For all those who entered the crypto market after the 2017 bull run – here are few lessons from the HODLERS from the last bull run(s).

This is our attempt at making all you newbies aware of the mistakes veteran cryptoers did.

Let’s get started…

Don’t FOMO in to all the hype

FomoIt’s hard not to FOMO in crypto.  The trick is to make sure you don’t lose your shirt in crazy bets.  Always limit your bets to what you are comfortable losing.

The common ways you can become victim of FOMO are:

  • Following your favorite YouTuber without actually doing your own research on the project.
  • Investing into projects at the top.
  • Believing in promises of 100x or 1000x without any substance behind those claims.

HODLing far too long

Remember why you are into crypto – to make the money.

Never fall in love with your crypto, and HODL the tokens even when they are 10x and more.

Have a strategy to take your capital out before you become a HODLer.  

If you believe the project really has what it takes to go beyond 100x and more, just sell in instalments so as to not miss the ride.

One of the best ways to HODL is to take your capital in full and profit in tranches.

This rekt story will give you a right perspective of what it looks like, it’s one of many:

Don’t put all your eggs in one basket

Never go all in on one project. No matter how strong the project may look, even the projects with strong fundamentals don’t do well sometimes. 

And, you will be kicking yourself watching other projects go up and your portfolio just doesn’t seem to make a move.

And don’t over do it and have a portfolio with over 100 projects either. It is very difficult not to have invested in more than 15 projects but anything less than 20 is a good way to go, in our opinion. 

Put aside the share of Profits for Taxes.

One way you can get a good night’s sleep is by paying taxes. 

Always keep a habit of putting aside a % of your profits in USDT or other stable coins, as a reserve to take advantage of market volatility and also to meet your tax obligations. 

Exchanges are more evil during bull run

Foreign ExchangesDon’t trust exchanges. Yes we already know that, but they play more games during bullrun, some intentional and some technical. 

Many exchanges tend to go under maintenance when the prices shoot up too high too soon (Coinbase?), and you can’t sell. 

And the shady exchanges scam out before you know.

Regulators seem interested when the market cap of these projects goes through the roof, which then adds FUD around the project crashing the prices.  

Exchange may freeze funds pending investigations when such issues arise.

Take for example OKEx. Users are unable to withdraw their assets from the exchange for almost a month now, not certain if they ever will, and all that started with the legal dispute.

Never fall for Arbitrage gains

Arbitrage is when you buy in one exchange at a lower rate and sell on the other for a higher rate to take some profits. 

Some shady exchanges show a lot higher prices than the other genuine exchanges and when you deposit your assets to sell at those prices there won’t be actual volume to execute the trade. You may be stuck with either a high fee for withdrawal or other funky rules to take your own money out. 

Remember, there is no free Giveaway

Free CryptoScammers rise with the rising market.  

When the crypto market buzzes with all time highs – scammers cash in big time on newbies.

The most lucrative scam in crypto is ‘Free Giveaway’. Whether it be through YouYube ads or discussion groups and wherever they can get your attention.  Read this article on various sophisticated scams that are being deployed.

We hope these lessons help you through your trades and crypto life.  Stay safe and always DYOR.

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

 

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Crypto Roundup: All Your YouTube Influencers in One Place

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crypto news

Visit our Crypto Roundup section daily for a dose of all your favorite Crypto YouTube influencers in one place.    

Worried about missing updates from your favorite YouTube crypto influencers?  

Welcome to the Crypto Roundup.  

On this page, we will post a quick summary of the videos from some of the most popular YouTube crypto influencers.

Ivan on Tech  Altcoin Daily

Crypto Zombie Box Mining

Ellio Trades Lark Davis

Data Dash Bitboy Crypto

MMCrypto Chico Crypto

Altcoin Daily

Video title: The United States Just Brought Bitcoin into the National Conversation!! | Cryptocurrency in 2021

Date: 16-Nov-20

  • Former National Treasurer and the new US Senator Elected, Cynthia Lummis, said Bitcoin fits the bill as a good store of value as it is finite and limited, unlike the inflationary fiat currency.

  • Grayscale adds over 7000 more bitcoin in just the last 24 hours.
  • Just over 16% ETH staked for ETH 2.0 launch on Dec 2 2020.
  • Bitcoin Cash hard fork takes place tomorrow.

Crypto Zombie

Video Title: WARNING!!! BITCOIN 2017 BEAR FRACTAL RETURNS!!! BTC WORST CASE SCENARIO…

Date: 14-Nov-2020

  • Institutional money starts flowing into bitcoin.

  • Paypal goes live with its crypto trading platform for eligible customers. They have also raised the buying limits from the initially set $10,000 to $20,000 per week.
  • DIA, an DeFI Oracle provider, integrates with Polkadot.

Ivan on tech 

Video Title: BITCOIN WILL DO SOMETHING INSANE THIS WEEK!!!! -30% DUMP AHEAD vs $20,000 PARTY – Programmer

Date: 16-Nov-2020

  • Bitcoin could make a big move this week, either hit 20K or we may see a 20% to 30% drop
  • Chainlink partners with Etherisc to deliver agricultural insurance in Kenya.

Ellio Trades

Video Title: UNLOCKING $100 TRILLION? This low cap gem seeks to bridge CeFi and DeFi

Date: 15-Nov-2020

  • DeFI could be similar to the ICO craze in 2017
  • Low cap gem: AllianceBlock
  • AllianceBlock is bridging the gap between DeFi and CeFi
  • AllianceBlock Partnership with Orion Protocol and Chainlink.

Chico Crypto

Video Title: WARNING! An “EVIL” Entity Wants Control of BITCOIN…

Date: 15-Nov-2020

https://www.youtube.com/watch?v=45Ac-5y2ofg

  • 90% of Bitcoin’s mining pools are controlled by China based mining pools
  • As the value of bitcoin goes up – there is a threat of push to ‘control’ the network from China
  • Binance is looking to push through the 50% mining share and Chico believes this could be dangerous

Visit our Crypto Roundup section daily for a dose of all your favorite Crypto YouTube influencers in one place. 

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

Continue Reading

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