If there is one asset, outside of the crypto universe, that bitcoin often gets mentioned in the same breath with, it is gold. The yellow metal has several qualities to which bitcoin and other digital currencies aspire, namely bullion has been used as currency, it is a store of value and seen as a credible alternative to fiat currencies.
Still, bitcoin has a way to go to surpass gold on the investment front.
“Last year, when bitcoin prices rose from their 2017 starting value of just under $1,000 to over $19,000 by mid-December, market chatter was that bitcoin was usurping gold’s role as a store of value and alternative to fiat currencies,” reports CNBC. “After all, bitcoin’s price was skyrocketing, while gold was languishing, staying mostly in the $1,200 an ounce range, despite rising geopolitical worries.”
Commodities as an asset class have a reputation for volatility, but gold is one of the more docile commodities, meaning its comparisons to highly volatile bitcoin may miss the mark. Take the SPDR Gold Shares (GLD) as an example. GLD is an exchange traded fund backed by physical gold. It traded around $118 for much of December while bitcoin was flirting with $20,000. Today, GLD is flirting with $127 while bitcoin is creeping toward $8,900 but only after following below $6,700 earlier this year.
Said another way, gold is often embraced by conservative investors. In its still young life span, bitcoin has proven highly inappropriate for conservative investors.
Age matters in financial markets and bitcoin is young by any metric, but gold is old. Really old.
“Gold has been a part of human history for at least 6,000 years, and it has functioned as money since at least 200 BCE in the ancient kingdom of Lydia,” according to State Street, which issues GLD. “Today, gold plays an important role in the international monetary system as a reserve asset in almost all central bank balance sheets.”
Speaking of central banks, many are major buyers of gold while some are looking to ban digital currencies in their respective countries.
Bitcoin and gold have some similarities, including scarcity of supply and that neither is regulated by a central bank.
“Bitcoin is engineered to slowly decline to zero growth around the year 2140, where it will reach maximum capacity of 21 million digital coins,” according to State Street. “Gold doesn’t have a set date or maximum capacity, but on average approximately 3,200 tonnes of gold have been mined every year, adding about 1.7% of the total stock of gold ever mined.”
$19 million worth of Bitcoin (BTC) seized in dark web drug probe
The U.S. government has seized $19 million worth of BTC from a drug trafficker, who allegedly laundered funds through the cryptocurrency on the original dark web marketplace known as “Silk Road.”
The U.S. Attorney’s Office for the Southern District of New York announced the news on Thursday, saying that the trafficker, Hugh Brian Haney, 60, was arrested near Columbus, Ohio. In 2017 and 2018, Haney allegedly transferred bitcoins representing drug proceeds he had earned through Silk Road to an account held at a company involved in the exchange of bitcoin and other cryptocurrencies. He claimed falsely that the source of these bitcoins was from mining.
Haney is charged with one count of concealment money laundering and one count of engaging in a financial transaction in a criminally derived property. The former count carries a maximum jail term of 20 years, while the latter a maximum term of 10 years.
Homeland Security Investigations (HSI) special agent-in-charge Angel M. Melendez said:
“HSI special agents employed blockchain analytics to uncover and seize bitcoins valued at $19 million and usher Haney out of the dark web shadows to face justice in the Southern District of New York.”
“Cryptocurrency is a great idea” – Ron Paul
During a recent “Squawk Alley” interview, Former Republican congressman and presidential candidate, Ron Paul- discusses how he is in favor of cryptocurrencies as well as block change technology. Apparently, he enjoys competing currencies and believes they are a good idea.
He also believes that the governments only have the right to step in to prevent fraud from taking place. In the interview, Paul states that, “the government has a role. And if somebody has a case that there is fraud, I think it should be investigated.” Paul then goes on to state that what he wants to do “is legalize the freedom of choice, absent blatant fraud.” Agreeably so, this is exactly the type of perspective that the crypto world needs.
Throughout the interview, Paul compares crypto to gold in many ways. He points out how both assets are competing with traditional fiat money. He discusses how our government has never been “very tolerant of competition, and they’re not even tolerant with using the Constitution to compete with the fiat dollar. Because gold and silver, you can’t use it.”
This isn’t the first time that Ron Paul has discussed his views on crypto. Back in 2014, the Former Republican Congressman displayed his concerns about the foundation of crypto and Bitcoin. However, he acquired a bearish pro-crypto outlook on the future of fiat money. Paul believes that the dollar won’t last long as “they all self-destruct.” According to Paul, the only competition for the dollar is the euro and yen- which “isn’t any good.”
33 CryptoCurrencies In 4 Words Or Less
We put together this list to describe the top cryptocurrencies that are worth your time in 2019.
Each gets four words. There are many!
Hopefully this provides orientation.
Scroll Down To View An Awesome Infographic from MrBtc.org!
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