Bitcoin, The New Gold

Beginning next week, FintekNews will monitor and compare the price of Bitcoin vs. Gold with a daily brief market comment. We have stated, and believe, that bitcoin will outperform gold well into the future.

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By Bill Taylor, CEO-FintekNews

November 17, 2016

The headline says it all. Yes, bitcoin is the new gold. While others may think that gold is still the number one safe haven, an alternative investment to negative economic events and a place to “hide” when markets get scary, we emphatically disagree. Let’s take a look at why the gold aficionados are dead wrong.

First, up until a short (a year or so?) time ago there really was no alternative to gold. Now there is. It’s bitcoin, a digital currency gaining worldwide acceptance. With the introduction this week of the Chicago Mercantile Exchange’s new bitcoin indexes (see below**) there is now a way to monitor in real time bitcoin’s price worldwide and have an established daily price (like the London gold price fix). Those did not exist on a cohesive basis until this week.

Second, bitcoin is not “your grampa’s gold”. No, no no. I hate to say it, because I am kind of in that camp, bbut uying gold in troubled times is just how it’s always been done. Millennials are different. They are tech savvy, bitcoin-aware and accept new ideas much more rapidly. They also cling to mobile devices which they use to transact everything from buying coffee to banking to investing. Think about this; the world is “awash” in younger tech savvy people. Hundreds of millions of them. Many do not even have a bank account to facilitate transactions, but mobile cell phones fill that bank gap on a direct basis. So, if they don’t have a bank account do you think they have a brokerage account to trade gold? Hardly. One click, I have a digital currency (bitcoin) transaction.

Third, if you need to move out of a local country’s currency (think China, Venezuela, etc) quickly, how do you put gold in your pockets/purse and get on a plane? Airport security would certainly suspect those heavy bulges and weight may mean something is up (body search on line four, please). Bitcoin in your online wallet on your mobile device…….”have a nice flight”.

The gold argument would be that liquidity in the metal is superior and it is…..for now. Transparency is much better……..it was but the CME has changed that this week (see below**). Market depth in gold to facilitate transactions is superior……… for now (changing faster than I can write). So, as my headline says, BITCOIN is the new gold. Just that the establishment does not realize it yet.

Beginning next week, FintekNews will be posting both the price of gold and bitcoin on its daily newsletter such as we do with the NASDAQ KFTX fintech index. Why? Because we have written past articles and forecasts stating that bitcoin will outperform gold in the future and now there is a way to compare both on a daily real time basis. We are not afraid to monitor our opinions.

That glitter and shine that was on gold is now shining brightly on bitcoin.

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** http://www.cmegroup.com/trading/cf-bitcoin-reference-rate.html