Is Gold under $2000 because of Bitcoin? [POLL]

Discussion in 'Cryptocurrencies' started by TimtheEnchanter, Oct 24, 2020.

Is Gold under $2000 because of Bitcoin?

  1. YES

    13.3%
  2. NO

    86.7%
  1. The pundits and analysts say Gold should be closer to $3000, yet it failed(briefly crossed) at the $2000 support level (so far).
     
  2. I heard Rick Rule say many months ago that Gold is doing an excellent job of "backing and filling". He added that this kind of technical action is required for a sustained move higher, where Gold will never retrace to the levels we now see.

    Rick is a gold perma-bull. But he may be right.
     
    TimtheEnchanter likes this.
  3. traider

    traider

    Is bitcoin below 20K because of gold?
     
    maxinger, ET180 and TimtheEnchanter like this.
  4. SunTrader

    SunTrader

    Gold is where it is at thanks to old geezers and

    Bitcoin is where it is at thanks to millennials.

    And the two may never mix.
     
    SouthbeachCTA, d08, They and 2 others like this.
  5. Here4money

    Here4money

    Is NQ at ATH because of gold?
     
  6. Overnight

    Overnight

    Ahh, that's a trick question! NQ is not at ATH!
     
    vanzandt likes this.
  7. Real Money

    Real Money

    Might want to read into gold leasing.

    From what I gather, the producers and bullion banks don't mind falling prices, as it supports the leasing market by providing income to banks since it's an incentive for producers to lease the metal, sell it into the spot market, and utilize the cash proceeds to fund production operations.

    In such a scenario, the lease obligation is settled at a time when spot is lower than when the lease agreement was entered into.

    So the bullion banks lend the metal, hedge price risk, and collect payment while the producers get to fund mining/production at rates favorable to funding rates, given current gold leasing rates.

    https://www.kitco.com/commentaries/2016-05-06/Gold-Leasing-Explained.html

    TLDR
    There are huge amounts of physical that is hedged, stored, and leased. Forward production and acquisition is borrowed against and/or hedged as well.
     
    johnarb likes this.
  8. ET180

    ET180

    Gold and bitcoin are where they are thanks to central bank and government debt / irresponsibility. Central banks buy gold. They don't buy bitcoin.
     
  9. SunTrader

    SunTrader

    If you say so.
     
  10. johnarb

    johnarb

    [​IMG]

    https://finance.yahoo.com/news/bitcoin-rivalry-gold-plus-millennial-154337073.html

    Bitcoin’s Rivalry With Gold Plus Millennial Interest Gives It ‘Considerable’ Upside Potential: JPMorgan

    Zack Voell
    Sat, October 24, 2020, 8:43 AM PDT·2 mins read


    [​IMG]
    Bitcoin has proven itself to be a risk asset, not a safe haven, with “considerable” potential upside, according to a Friday note from JPMorgan’s Global Quantitative and Derivatives Strategy team obtained by CoinDesk.

    Writing to clients in “Flows & Liquidity,” one of JPMorgan’s flagship publications, the authors said that characterizing bitcoin as a “risk” asset rather than a “safe” asset is “more appropriate” based on the leading cryptocurrency’s increased positive correlation with the Standard & Poor’s 500 Index since March.

    Bitcoin’s function as a risk asset is “likely more of a reflection of a need for an ‘alternative’ currency rather than a need for a ‘safe’ asset or ‘hedge’.”

    “To some extent, this is also true with gold,” the authors add, although the yellow metal’s volatility is notably lower than bitcoin’s.

    How investors currently perceive bitcoin’s value implies that it could “compete more intensely” with gold as an “alternative” currency over the coming years, the analysts wrote. Bitcoin’s role as a gold competitor is amplified by Millennial investors’ interest in cryptocurrency, according to the note, and the inevitability of the younger investor demographic becoming “over time a more important component” of the investor universe.

    Bitcoin’s market capitalization would have to increase by a factor of 10 before it could match the total private sector investment in gold, the author’s note, adding that “even a modest crowding out of gold as an alternative currency over the longer term would imply doubling or tripling of the bitcoin price from here.”

    “In other words, the potential long-term upside for bitcoin is considerable.”

    Beyond Millennial investor interest, the note highlights the significance of corporate and legacy investor interest giving credibility to bitcoin as an investment vehicle. Specifically, PayPal’s Wednesday announcement of support for bitcoin and alternative cryptocurrencies (altcoins) is “another big step toward corporate support for bitcoin,” according to the note.

    The authors also identify “strong growth” in institutional investor interest in bitcoin indicated by activity in CME futures and options markets. As of Thursday, for example, CME bitcoin futures markets quietly became the second-largest measured by open interest, overtaking BitMEX and Binance, two dominant crypto-only trading platforms.

    Utility as a store of value isn’t the only catalyst for potential upside, however. According to the authors, the price of bitcoin and altcoins could appreciate significantly if adopted as means of payment. “The more economic agents accept cryptocurrency as a means of payment in the future, the higher their utility and value,” the note says.

    Ultimately, even though bitcoin “looks currently overbought for the near term,” the authors reiterate that the potential long-term upside for bitcoin is “considerable.”
     
    #10     Oct 26, 2020
    SunTrader likes this.