Bitcoin is the new gold. This is a hated idea if you are a platinum group metal (PGM) stacker who has been stashing their metals for years awaiting the righteous comeuppance. So now at hand it appears up comes a crazy invention to spoil the show.
If you love bitcoin you love the idea. Gold was an early technology. It was likely the first and only metal experienced by humans for many a century. You could form it into things, and it looked and acted like nothing else. Its awe-striking look and feel is as strong today as ever and it remains precious to the primitive emotions of humans at every corner of the global economy. But its use case as the place to secure your net worth in times of trouble has been surpassed by bitcoin and this is only the beginning of the rise of digital assets as a safe haven. Bitcoin is the king of this new space and will remain so.
But these are just words. The digital world is full of them: where is the evidence for this grandiose claim?
Well, today China announced tariffs on the U.S. in retaliation for American tariffs and like clockwork President Trump has tweeted that a terrible retribution will be served.
Clunk, down goes the market in the U.K. before U.S. open when the Chinese retaliate. The market recovers. Crash, down goes the market when Trump responds.
So much is to be expected, a reaction as text book as you can get, but what about gold, what about bitcoin?
Well take a look:
We can see gold getting a little lead on bitcoin (BTC) in London when the China retaliation news hits but look at BTC exploding a good 90 minutes ahead of the U.S. news, well before gold, both well before the equities markets get wind of it and react.
BTC outperforms gold by a mile and leads both gold and 500 points of Dow action.
Now you can take the line that this is a pure coincidence, but that is long since unbelievable to me.
Information and money move like a gas and its almost impossible to keep them contained. We can see in the above chart how those with big enough or close enough ears to hear what is going on are parlaying that into cash and its bitcoin and gold, but bitcoin first and foremost.
My point, however, is bitcoin is replacing gold as the safe harbor asset and that is a role that is only going to grow and while there is only $200 billion or so of it, it must fly higher than $5 trillion gold and its entourage of paper proxies.
Bitcoin is the new gold, but what is good for bitcoin is good for gold, so the PGM fans need not despair because the main thing that will be driving them both is sat in the White House for at least another year or so and with “luck” will still be there for a few more years on top.
In 2018 Chambers won Journalist of the Year in the Business Market Commentary category in the State Street U.K. Institutional Press Awards.