The major difference between Gold and Bitcoin is the way these assets are mined, produced, and stored. Thus, the way Gold and bitcoin are mined and stored affects their future value. Very few Bitcoin investors understand these important dynamics.
While the debate will continue on which one will be the better future store of value, there are some very interesting dynamics taking place in the Bitcoin Mining Industry that few investors are aware of.
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I can’t think of one logical, rational reason for Bitcoin to EVER go back to 70,000.
In the world of irrational investing, hopium, delusion, or other mental aberration anything is possible.
Great analysis Steve. NO one explains this as YOU do. I used to sit around and wait for silver to take off…..Now, I sit around and wait for Bitcoin to fall off the cliff. And, I do get time to enjoy life in-between. Thank you for the education.
Thanks much Steve. Excellent perspective. Reminds me of the old saying “ I know I lose on the cost of every item BUT I make up for it in volume”. Lol. It’s so crazy, how many companies/industries can “squirrel away” the product they produce yet still financially stay afloat? Obviously, selling shares of the company allows them to do that (for now).
I would say the major difference between gold and Bitcoin is value. Value is based on utility according to most dictionaries.
Bitcoin investors confuse price and value, which are very different.
Price is determined by supply, demand and emotion, while value is determined by utility. Bitcoin investors plead that Bitcoin is a store of value, yet Bitcoin has no quality in which to store value, unlike gold and silver.
The lack of value in Bitcoin can be easily perceived in a hypothetical example, where the price of both Bitcoin and gold both fall to zero. In such a scenario, the investors would still hold their Bitcoin and their gold. But there would still be demand for gold, as it has utility in electronics, jewelry, metal alloys, etc. So one could still sell one’s gold into those industries. But where would there be any demand for Bitcoin, as it has no utility? What would one use a Bitcoin for?
Don’t conflate price (based on emotion) and value (based on utility). Consult almost any English dictionary and you will find that value is defined by utility.