196 sats \ 9 replies \ @kepford 3 Apr \ on: Gold Vs. Bitcoin: The Winner Is... bitcoin
One disagreement with the image in this article. Maybe I'm missing something but it seems to be wrong on liquidity.
How is gold more liquid than bitcoin? If I wanna sell 1 million in actual gold that's gonna be difficult and require security to exchange the gold. Bitcoin wins on that. The exception would be if we are talking about paper gold and in that case gold is no more private than bitcoin.
One of the annoying things that happens with these gold debates is that we bitcoiners get on the defense because we don't require the other side to play by our rules. Bitcoiners know that paper bitcoin and ETFs are not the real thing. But gold people pretend that paper certs or options on gold are the same as gold. If we want to do proper comparison we can include paper gold and ETFs but don't hold bitcoin to the self custody standard if we aren't going to hold gold to the same standard.
You're right re paper v physical. The weird thing is the Doug Casey blog emphasizes physical gold, and doesn't consider paper gold as real. So, logically, I'm guessing the argument here is that physical gold beats bitcoin now re liquidity? Not a strong argument.
The author's argument does make some sense, you see.
Gold also has a fleeting advantage in liquidity, fungibility and privacy, and recognition. However, Bitcoin is eroding those advantages every day.
Monetary Attribute #3: Liquidity
Having a large global pool of buyers and sellers—liquidity—is critically important for any serious money.With a market cap of around $14.6 trillion, gold has a large pool of global liquidity.At around $1.3 trillion, Bitcoin has a much smaller pool of global liquidity.However, it is growing quickly.If the Bitcoin price goes up 10x—which it has done many times in its history, and I expect it will do again soon—Bitcoin’s pool of global liquidity will be within spitting distance of gold’s.If Bitcoin’s market cap and pool of liquidity continue to grow faster than gold’s, it will erode gold’s advantage. But for now, gold wins.Verdict: Gold Wins
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This is my point. What is this large pool of buyers. They are not actually taking custody of the gold. The gold is not in their custody. Sure, some are but it is a fraction right? Certificates are changing hands. That's what is happening. If you compare actual physical gold changing hands to bitcoin I would be shocked if bitcoin loses. I could be wrong but I doubt it.
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I think the author is overlooking an important issue here. They're only evaluating the business in a purely financial sense.
paper gold ?