Gold and Bitcoin- Besties or Enemies?

Below is a graph of the gold price and Bitcoin since the beginning of the year. Many of the investors in gold and Bitcoin agree that money printing by central banks should stop.

They also agree that governments should help people with special programs during a crisis but that once a crisis ends the government should repay the money it borrowed.

No one who owns these investments wants to see governments borrow money every year forever [which is what they have done and plan to do still].

Gold V/S Bitcoin Chart

The above paragraph is a list of what investors in gold and Bitcoin agree upon.

However, most of this year the price of gold and Bitcoin have moved in opposite directions – when gold is rising bitcoin is declining and vice versa.

Although there are some agreements among investors that both investment choices offer the same alternative to central bank cash, there are many that strongly believe that one is better than the other. 

Gold V/S Bitcoin

Some bitcoiners like Michael Saylor are using social media to tell everyone that gold and silver are going to zero because bitcoin ‘replaces’ them.  Demographics play a big factor in determining if someone owns bitcoin versus gold (or silver).

Younger generations tend to own bitcoin because technology is more trusted by them than by old people – and they are looking for a quick rise and outlandish returns.

Baby boomers have more wealth to protect, they understand that wealth must be passed down to generations and that gold and silver has stood the test of time. They also have experience with declining markets and tax changes.

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Baby Boomer gold bulls like Peter Schiff understand governments cannot easily tax physical metal holdings, but that digital blockchains are completely open for governments to study and tax.

Also, let’s now talk about things Bitcoiners and physical metal owners disagree about.  Electricity is a big one! How can bitcoin be a storage of wealth if a simple blackout means you cannot spend it, or buy it, or even prove that you ‘own’ it?

And what exactly does it mean to ‘own’ bitcoin?  If your bitcoin gets stored on an app offered to you by some platform company or brokerage, you don’t actually own anything.

And there is no way to convert Bitcoin into any type of physical form. Physical metal is the only thing that you truly own because it requires no broker, government, or app, not even electricity to be wealthy. Moreover, this argument was made by Peter Schiff in a Twitter reply to Elon Musk.

Peter Schiff Tweet

And one further tweet on the electricity issue and Bitcoin.

Electricity Issue and Bitcoin Tweet

And then there is the problem of forgotten passwords or destroyed drives that make Bitcoin unretrievable – and with other cryptocurrencies that have seen sharp rises, such as Shiba, there is the question on where it can even be converted into a usable form.

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As stated above, many Bitcoin and gold investors hold these assets for many of the same reasons. However, there is the main distinction that Bitcoin is entirely digital, and gold is a physical asset.

There can be a place for both Bitcoin and gold in a portfolio, but the volatility and digital nature of bitcoin do not make it a substitute for gold in a portfolio.

Besties or Enemies?

Globally, Central Banks have two levers in their quiver to assist in guiding an economy, fiscal and monetary policy.  Fiscal policies (such as the recently passed Infrastructure Bill in the U.S.) seeks to boost employment and economic activity through increased spending by the government.

Through monetary policy, Central Banks see to stimulate activity by lowering or increasing policy interest rates. It is our view that global governments and Central Banks will never allow independent cryptocurrencies to gain traction to the point that their monetary or fiscal policy levels are weakened. 

As an example, the ability for citizens to pay taxes and/or receive entitlements via independent cryptos is highly unlikely. 

However, we do see the government issuing their own digital currencies in the future as the power of these policy levers are maintained.

Central banks buy gold and hold gold to preserve wealth because gold does not belong to anyone else. Central banks will never ‘issue’ their own gold because they cannot make gold, only supernovas do that.

So, it seems bitcoin and gold are besties, standing together against needless money printing. But like brothers and like enemies they disagree loudly when comparing themselves to one another in search of supremacy.


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From The Trading Desk


Stock Update:

Gold Offer Dublin – We currently have a limited number of gold 1oz Gold Maple coins for storage or delivery in Ireland at spot plus 3%.

Please contact our trading desk to avail of this offer. 

Gold Offer Zurich – We currently have a limited number of Gold 1kg bars for storage in Zurich at spot plus 1.25%.

Please contact our trading desk to avail of this offer. 

Excellent stock and availability on all gold coins and bars with 1oz bars at a very competitive 3.75% over spot. 

Silver coins are now available for delivery or storage in Ireland and the EU with the lowest premium in the market.

Starting as low as spot plus 32% for Silver Britannia’s.

Silver Britannia’s for UK delivery or storage are still available at the lowest premium in the market also (which includes VAT at 20%).

These can now be purchased online. 

Silver 100oz and 1000oz bars are also available VAT-free in Zurich starting at 8% for the 1000oz bars and 12.5% for the 100oz bars. 

Please see below our extended trading hours. 

** We have extended our opening hours. Phone lines, online ordering, and WebChat are now open until 09:00-22:00 (Europe/Dublin) USA 09:00 to 17:00 EST**

Market Update:

Gold has held on to its gains after we had the big move up last week on the back of the records CPI numbers out of the Fed Reserve.

The combination of a dovish FOMC and really strong inflation numbers helped drive real yields lower which helped support gold even on the back of the stronger USD. 

We are continuing to see consistent flows coming in on the buy-side over the last week, with a buy-through rate at 80% with a noticeable increase in the ticket size too. 

Moreover, we have some excellent offers at the moment (see above) on Gold Maple leaf 1oz coins for delivery or storage in Ireland and gold kilo bars for storage in Zurich.

Please call our trading desk to avail of this limited time offer as stock is limited. 


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GOLD PRICES (USD, GBP & EUR – AM/ PM LBMA Fix)

17-11-2021 1858.45 1864.90 1383.80 1384.87 1642.68 1648.01
16-11-2021 1872.25 1859.20 1392.02 1384.73 1648.52 1638.88
15-11-2021 1863.80 1859.90 1388.72 1385.07 1627.10 1626.11
12-11-2021 1850.00 1860.55 1381.03 1387.97 1616.16 1624.82
11-11-2021 1859.25 1857.90 1387.93 1387.11 1620.89 1620.09
10-11-2021 1824.95 1859.40 1348.46 1375.21 1576.03 1608.57
09-11-2021 1824.40 1827.30 1341.85 1348.00 1573.18 1575.13
08-11-2021 1818.00 1822.35 1347.87 1344.71 1572.21 1574.51
05-11-2021 1793.20 1801.85 1335.58 1338.23 1554.70 1562.92
04-11-2021 1778.10 1796.15 1305.30 1330.05 1540.19 1556.00

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Learn why Switzerland remains a safe-haven jurisdiction for owning precious metals. Access Our Most Popular Guide, the Essential Guide to Storing Gold in Switzerland here

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Stephen Flood

Stephen Flood is the CEO of GoldCore. He is a former Wall Street equity trader and FinTech expert. He has been involved in the precious metals markets since 2004 and has appeared as an expert contributor on CNBC, CNN, BBC, RTE & Bloomberg TV and has had articles published in the Irish Times, Irish Independent and The Sunday Business Post.

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