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Bitcoin is Interesting, But It’s Not the Next Gold

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Last year the word bitcoin became part of the everyday lexicon in America, and many parts of the world. The phenomenon “investment,” was being traded by grandmas and kids. Coverage of bitcoin’s rises and falls has been on TV every day for months now. If there was ever a classic bubble, this was it.

Olga Kharif reports at Bloomberg:

Bitcoin tumbled for a fifth day, dropping below $7,000 for the first time since November and leading other digital tokens lower, as a backlash by banks and government regulators against the speculative frenzy that drove cryptocurrencies to dizzying heights last year picks up steam.

The biggest digital currency sank as much as 22 percent to $6,579, before trading at $7,054 as of 4:08 p.m. in New York, according to composite Bloomberg pricing. It has erased about 65 percent of its value from a record high $19,511 in December. Rival coins also retreated on Monday, with Ripple losing as much as 21 percent and Ethereum and Litecoin also weaker.

“Although no fundamental change triggered this crash, the parabolic growth this market has experienced had to slow down at some point,” Lucas Nuzzi, a senior analyst at Digital Asset Research, wrote in an email. “All that it took this time was a large lot of sell orders.”

The technology behind bitcoin is interesting, and there are certainly other great uses for blockchain, but was there ever any real value in the crypto currency itself? With Central Banks clamping down, and prices dropping fast, the world might not have a chance to find out.

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One thing is certain though, bitcoin was never the next gold. Despite investors who sing its virtues, bitcoin doesn’t yet have the history or respect to come close to gold’s reliability. Gold is a hard, tangible asset that works, even if the lights go out. That’s its appeal. Bitcoin on the other hand relies completely on the grid to operate. If you’re looking for a store of value in disaster, there’s nothing better than gold.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.
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