What happens to the price of gold if BTC becomes “digital gold”?

8 points by aaronwalker 3 years ago | 16 comments

It is highlighted that over time, Bitcoin could act as an independent store of value—like gold is now. Both have a limited supply, but Bitcoin is easier to transact with and open to anyone. If this is the case, then what would happen to the value of gold? It’s total market cap is around [$11 Trillion](https://companiesmarketcap.com/gold/marketcap/). A lot of this is used for jewelry, but it seems like the gold that’s used for financial trading could go out of circulation.

hotpotamus 3 years ago |

I find it funny to say that Bitcoin is easier and more open since people managed to figure out how to transact in gold thousands of years ago and Bitcoin only in 2008.

aaronwalker 3 years ago | |

Not technologically easier to come up with, but easier to transact with. Buying gold from someone halfway around the world would take weeks for it to get to me. With Bitcoin I can do it in a fraction of a second.

hotpotamus 3 years ago | | |

Have you used Bitcoin for this purpose? I have and I can tell you it takes much longer than a fraction of a second. My credit card does that job just fine though.

recvonline 3 years ago |

1. Gold will never go out of circulation. It‘s the commodity with the „longest“ track record.

2. The price of gold is highly manipulated, like everything else. You can‘t tell how much is produced each day, or how much is in circulation. Gold will always exist and will always have a „price“.

3. BTC could be part of the store of value story, but then again, it will always be manipulated (by governments, trading firms etc)

You can‘t calculate or foresee price of material which is in demand. Look at oil. It „should“ be so much higher, but other people say no, since there is an abundance of oil still in storage.

If things are getting BIG (like oil, Gold, maybe BTC), the price will become political and therefore not be able to calculate.

Bostonian 3 years ago | |

Gold ETFs such as GLD and gold futures trade in the open market -- currently the price of gold is not "highly manipulated". It was manipulated under the Bretton Woods monetary system.

recvonline 3 years ago | | |

https://www.bloomberg.com/news/articles/2021-07-22/gold-trad...

mikewarot 3 years ago |

What happened to Gold when Nixon closed the "Gold Window" in 1971? It didn't magically become worthless... what happened instead is that the US Dollar lost most of it's value. The only think keeping it alive is the PetroDollar system instituted by Nixon and Kissinger.

I fail to see how BTC can possibly devalue gold. If the dollar were to further slide in value, if people magically started using BTC instead... the Dollar price of Gold would simply go up even more.

>it seems like the gold that’s used for financial trading could go out of circulation.

Yes, it's been sitting in vaults for decades, that wouldn't change.

Finnucane 3 years ago | |

Indeed, the lat 50 years, we’ve known nothing except poverty and economic decline.

mikewarot 3 years ago | | |

Yep, the working class as effectively been abandoned by the RepubliCratic duopoly that infests American politics.

It used to be that if you worked hard, and put in your time, you could retire and have a well deserved pension. Now the kids are lucky to have a 401k with matching that won't come close. They'll never be able to retire.

Never forget that programmers aren't, for the most part, the working class.

Bostonian 3 years ago |

Gold is much less volatile than BTC and seems like a better inflation hedge. I don't expect to buy things with gold directly, but I can invest in a gold ETF such as GLD, and I can easily convert GLD to cash by selling.

Finnucane 3 years ago |

When the power goes out, gold will still keep you warm in bed at night.

al2o3cr 3 years ago |

     It is highlighted that over time, Bitcoin could act as an independent store of value

Yeah, and monkeys "could" fly out of my butt

simonblack 3 years ago |

"If you can't touch it, or hold it in your hot little hand, YOU DON'T OWN IT."

Bitcoin is only a number in a machine. 'Paper Gold' is just that, a piece of paper.

Physical Gold is the only store of portable wealth you should bother holding. And 'holding' implies that the gold is not entrusted to anybody else (banks, brokers, safety-deposit boxes, etc) but is held by you personally.

speedgoose 3 years ago |

Gold will stay safer over very long periods of time. We don’t even know if P≠NP

gjvc 3 years ago |

garbage