Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Why You Shouldn’t Get Excited About Gold Price Mini-Rally - 26th Jan 21
The Truth About Personal Savings Everybody Should Know and Think About - 26th Jan 21
4 Economic Challenges for 2021 - 26th Jan 21
Scan Computers 2021 "Awaiting Picking" - 5950x RTX 3080 Custom PC Build Stock Status - 26th Jan 21
The End of the World History Stock Market Chart : Big Pattern = Big Move - 26th Jan 21
Stock Market Recent Sector Triggers Suggest Stocks May Enter Rally Phase - 26th Jan 21
3 Top-Performing Tech Stocks for 2021 - 26th Jan 21
5 Tips to Manage Your Debt - 26th Jan 21
Stock Market Intermediate Trend Intact - 25th Jan 21
Precious Metals Could Decline Before their Next Attempt to Rally - 25th Jan 21
Great Ways of Choosing Good CMMS Software for a Business - 25th Jan 21
The Dark Forces behind American Insurrectionists - 25th Jan 21
Economic Stimulus Doesn’t Always Stimulate – Pushing On A String - 25th Jan 21
Can Karcher K7 Pressure Washer Clean a Weed Infested Driveway? Extreme Power Test - 25th Jan 21
Lockdown Sea Shanty Craze - "Drunken Sailor" on the Pirate Falls Crazy Boat Ride - 25th Jan 21
Intel Empire Fights Back with Rocket and Alder Lake! - 24th Jan 21
4 Reasons for Coronavirus 2021 Hope - 24th Jan 21
Apple M1 Chip Another Nail in Intel's Coffin - Top AI Tech Stocks 2021 - 24th Jan 21
Stock Market: Why You Should Prepare for a Jump in Volatility - 24th Jan 21
What’s next for Bitcoin Price – $56k or $16k? - 24th Jan 21
How Does Credit Repair Work? - 24th Jan 21
Silver Price 2021 Roadmap - 22nd Jan 21
Why Biden Wants to Win the Fight for $15 Federal Minimum Wage - 22nd Jan 21
Here’s Why Gold Recently Moved Up - 22nd Jan 21
US Dollar Decline creates New Sector Opportunities to Trade - 22nd Jan 21
Sandisk Extreme Micro SDXC Memory Card Read Write Speed Test Actual vs Sales Pitch - 22nd Jan 21
NHS Recommends Oximeter Oxygen Sensor Monitors for Everyone 10 Months Late! - 22nd Jan 21
DoorDash Has All the Makings of the “Next Amazon” - 22nd Jan 21
How to Survive a Silver-Gold Sucker Punch - 22nd Jan 21
2021: The Year of the Gripping Hand - 22nd Jan 21
Technology Minerals appoints ex-BP Petrochemicals CEO as Advisor - 22nd Jan 21
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Bitcoin's Five Big Advantages Over Gold

Commodities / Bitcoin Dec 20, 2013 - 11:56 AM GMT

By: Money_Morning


Michael A. Robinson writes: I strongly believe that everyone should own some physical gold. It's been the store of value, and the preferred method of asset protection for more than 5,000 years. It's irreplaceable.

But I also believe that every investor ought to own at least some of the new digital money known as bitcoin.

You see, most of the people buying bitcoin are interested in the explosive growth potential the new "currency" offers, as more and more retailers, CEOs, and governments embrace it.

But they're getting more than that.

Bitcoin comes with some unique wealth preservation properties, too. And while it will never replace the market's most popular hedge, it does have five distinct advantages over gold...

No. 1: The Supply Is Absolutely Fixed

A lot of investors look on gold as a store of wealth because of the precious metal's limited supply.

Actually, that's really only true in the short term. Yes, there are only so many mines operating at any point in time, so the immediate supply remains fixed on any given day.

However, exploration teams are scouring the planet and finding new gold reserves all the time. When the price of gold rises, those new tracts become more economical, meaning the supply of gold can in fact expand.

It's the exact opposite with bitcoin. They are created when someone discovers a new mining block on the global computer network. The number of blocks is capped at 6 per hour.

Moreover, bitcoins generated per block decrease geometrically, falling 50% every 4 years. The number of bitcoins mined will never exceed 21 million by the year 2140.

Roughly 57% of the total maximum have already been mined...

No. 2: This Is a Real Currency

It began when President Roosevelt confiscated America's gold during the Great Depression. And when President Nixon took the United States off the last vestiges of the gold standard in the early 1970s, the metal's days as a true currency were over.

Sure, you can still buy gold coins, but just try using them to pay for something at Walmart or the local convenience store. People will look at you like you're crazy.

But in the United States alone, more than 700,000 retail outlets accept bitcoin, including chains like 7-11 and Wal-Mart. And in France, workers can choose to have their salaries paid in this new digital currency.

In fact, bitcoin is already recognized around the world as a medium of exchange and is traded in roughly 90 different markets from Toronto to Singapore every single day.

No. 3: Central Banks Can't Manipulate the Price

Paul Craig Roberts can't afford to make baseless charges. A noted economist, Roberts served as Assistant Secretary of the Treasury during the Reagan administration and is a former editor of the Wall Street Journal.

So, were he to make a wild accusation, that would undermine his credibility as a market analyst and possibly ruin his career.

But Roberts is adamant that a big part of the recent rout in both gold and silver prices is a direct result of central-bank manipulation. Roberts believes the Fed led a coalition of mega-banks that sold off gold reserves and certificates to support the dollar in an era of mega-printing.

Veteran metals trader Andrew Maguire agrees. The former Goldman Sachs employee-turned-whistleblower says more than 500 tons of "paper gold" got dumped on the market in April alone.

With bitcoin, however, it would be extremely difficult for global bankers to act in concert to secretly drive up or down the price as they can with gold. Anyone with a Web connection can check the volume of bitcoin trading around the world almost in real time.

In other words, though individual transactions occur in private, the markets upon which they are traded are highly transparent.

No. 4: It's Super Liquid

If you own physical gold in your home and want to sell it, you have to grab it, put it in the car, and drive to the local dealer. There's always the concern you could be robbed in the process.

Moreover, most stores are only open 10 a.m. to 6 p.m. five or six days a week. That greatly limits your market access.

If you are paying someone to store your metals offsite, you will obviously incur fees. And when you sell your gold it could take several days for the transaction to finish and for the money to end up in your account.

With physical gold, your liquidity is limited by both market access and the size of your ingots or coins.

On the other hand, bitcoin is a super-liquid currency. Not only can you buy and sell basically 24-7, you can "chop it up" into extremely small slices.

For instance, on the Camp BX exchange, you can divide a bitcoin down to 12 decimal points, which might look like this amount - 0.011111111111. At $550 a bitcoin, that gets down to $6.20, including commissions.

Just try chopping a gold ingot or coin down into such tiny increments.

No. 5: The Ultimate in Portability

Let's say you were fortunate to own $500,000 worth of gold, or about 415 ounces. That's nearly 26 pounds worth of metal you'd have to cart around if you wanted to move it in the event of an emergency.

Remember, there's no guarantee that during a natural disaster you'll be able to access your safety deposit box at your local bank. The police may close roads, or if the electricity is out, you may not be able to get to your gold in the first place.

With bitcoin, however, no such challenges exist. Since this a virtual currency, it lives online at your hosted wallet. So, you can access the funds from anywhere in the world as long as you have an Internet connection.

You also can download and store your bitcoin on a small USB thumb drive that will easily fit in shirt pocket. It doesn't get much more portable than that.

Thus, bitcoin occupies a unique space in the global financial system, one that clearly has some major advantages over gold.

Source :

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email:

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules