Earlier this week, in a Twitter debate with bullion dealer Peter Schiff on the relative merits of Bitcoin compared with gold as a store of value, Tesla CEO Elon Musk said, “you might as well have crypto.”
Musk has long been known for market-moving tweets in the crypto-verse, but this week his Twitter pumping powers have become divinatory. As of today, you might as well have a Bitcoin over a bar of gold if you want to preserve your value.
At 10:49 AM UTC today, Bitcoin hit its apex at $57,634, far exceeding the approximately $57,336 price calculated for a kilo of gold on TradingView.
When fiat money goes down, gold and crypto go up
The price of gold relative to Bitcoin is at an all-time low, while Bitcoin’s price itself is at an all-time high.
Last summer, the value of the US dollar fell sharply due to quantitative easing measures. The United States Federal Reserve rapidly printed an unprecedented amount of money. While government statistics said that the inflation rate was only 1%, the cost of living and the price of goods and services rose sharply during the pandemic.
Around this time, gold and Bitcoin both went up too. On July 1 a kilo of gold was $57,093. By August 4 it was $65,477. In the same period, the price of Bitcoin shot from $9,145 to a high on August 2 of $12,034. With the world’s premier reserve currency ailing, investors were drawn to both gold and Bitcoin as hedges against inflation.
The price of gold has since declined, though it has more or less remained stable. The real mover here, is of course Bitcoin, which is up almost fivefold.
How much more expensive will a Bitcoin be next week when compared to a kilo of gold? Or if the market should suddenly crash, how cheap?
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.