Is The Price Of BTC Affecting Gold? – Explained!

Bitcoin has been the talk of the town for many months now. People are excited about its rise in value and all the good things it can do for humanity. But, could it also be affecting Gold? With Bitcoin currently at around $11000 per coin, many have speculated that a rise in its price could put downward pressure on Gold. In the last few weeks, the price of Bitcoin has been steadily climbing.

At the time of writing, it is trading at a record high value. This has attracted investors who are now looking to add gold as an alternative investment to their portfolios. It is important to understand the difference between gold and bitcoin in order to make an informed decision on whether you should invest in them.

Is The Price Of BTC Affecting Gold

Is the Price of Btc Affecting Gold

Is the price of BTC affecting gold
Gold has been around for thousands of years and has played a crucial role in the economic history of mankind. It is mostly used as an investment vehicle by people like Warren Buffett, who believe it to be one of the most dependable investments on planet earth. In his 2013 letter to clients, he said, that gold “is still my favorite holding” (Buffets Letter 11th January ). As at today’s paper price ($1297) per ounce, its value compared with $11000 Bitcoin priced out makes gold look alluring despite being fairly distant from where we are now.

Gold is typically owned in financial institutions which are geared towards investing in fiat currency (paper money, coins, and government bonds) while Bitcoin is commonly bought or sold on exchanges where you trade cryptocurrency for a wide variety of goods and services. The volatility associated with that fact makes gold an attractive investment to some traders but not necessarily the owners of such stores who haven’t got tax liabilities etc owing.

About That Price Index

About That Price Index

The price index is calculated using various resources online including Bitcointalk’s forum, Coinmarketcap among many others; however, we do try our best to source as accurate pricing data as possible from across the web. We would like to state that the price index is our own perspective and views in good faith; however we encourage everyone on this forum (as well as any other participant/trader), should they find something inaccurately/illicitly calculated do let us know.

What Is the Difference Between Gold and Bitcoin?

What Is the Difference Between Gold and Bitcoin

As stated on the gold coins page, Bitcoin is a digital cryptocurrency and an asset class containing various cryptographic methods for ensuring security. It can be used to make payments both peer-to-peer (a direct transfer of money) as well as for international Fund transfers using various financial institutions. On the other hand, gold is mainly regarded by economists to be desirable because it can serve multiple purposes in terms of buying power, purposeful investment, or even just outright labor.

As such its value has been less dramatic over time when compared with other digital currencies put into circulation thus making it more suitable to hold long term as opposed to trading the asset. Is gold a good investment? What are your views? Let Me Know! We’ve got some other posts on the topic of gold and bitcoin, most recently starting from referring you to this informative video*:

If you enjoyed reading and would like to seek more information about investment precious metals then let me know. Please leave any questions/concerns in a comment below or mail thru my contact form here; I will get back after taking a look at your issue.

Can a Rise in the Price of Bitcoin Put Downward Pressure on Gold?

Can a Rise in the Price of Bitcoin Put Downward Pressure on Gold

No. Gold has been bailing out central banking quantitative easing since 1971 and it hasn’t stopped current bubble hyperinflation tsunami inflation driven by the Fed’s QE / SNB’s negative interest rates in Switzerland (Savings accounts pay a fee now; see: Switzerland goes fully cashless). Bitcoin takes no Central bank control or debt obligations on behalf of its users and investors [sic].

Those same life-depriving banker charlatans at JP Morgan Chase also bought $50 billion worth of Treasuries while selling mining technology to China even though we’re told fixed income markets will be ‘bullish’. They must have been lacking confidence in their plans for the next couple of decades. And none-the-less strangely I’ve seen them advising some people not to bother with gold because it’s too old, only 0 year Bitcoin Stocks! Always somehow a fresh new fad.

The real definition of an unsustainable Bubble is one that gets “too big” before it can collapse and necessarily end. So far Bitcoin looks very reasonable by comparison when it comes time to supply more capacity at least 4x higher per capita than the last cycle of this coming mania, probably before it’s started. But gold falls very short here and that brings another concern: Cannibalism from ‘all things silver’.

It appears like people are rather obsessed with paper dollars, the price for coinage, and metals generally; a global share-price hullabaloo in just about every asset at once on any market anywhere I’m seeing today myself and no one seems to be considering even looking too long into precious metals or Bitcoin.

Can Bitcoin volatility erase fiat currency? That depends on how volatile you consider your currency! $10 bill silver once traded for about $2 in 1913, so we could say it halved but after almost 100 years if you’re a high wage earner with long-term expectations that keep your currency stable then this was very safe indeed. 10x more “dollars” than Bitcoin? Why not have a 1 BTC per 3 silver times domestic production of gold between 1848 and the present date? X dollars.

Although the psychological market consensus seems to be still considerably lower for precious metals here’s some history mentioned by John Strahan via Wikipedia: “The dollar value of all forms.

Significant numbers (if any) of US$ signs have been tacked on – what you see today is the amount, in paper dollars and not inflated away by unbacked Federal Reserve currency. This “system” has brought nearly 100 trillion dollars to an end.” How do I know it’s over?

We’re having a problem about how best to visualize this for investors; many feel like we’ve already started off so strong compared with all previous super-booms that there leave little room for anything but flying from these as fast as possible because after 9/11 everyone became paranoid about money and we all went nuts with investments, so since our gold/silver drawdown was less than most central banks can print to bail out “everyone” we feel rich enough now.

So there must be nothing left but go on up into a higher and better consumptive asset class forever as it’s difficult to imagine that the 6 trillion dollars in paper money supply had ever actually been anything other than unbacked crassly inflating trickery having cost each one of us – like losing everything you own at once – never having any real value… If I’d said back then that no such thing existed worth.

Should You Invest in Gold or Bitcoin?

Should you invest in gold or bitcoin
The expected inflation rate on gold is currently less than 2/3rds of what the U.S. Government now offers in bonds, at 35% plus compound interest – it’s only 6+ years since they raised rates with 3 more times as much cash to spend and I’ve seen no reason why we can’t drop them all now back down again due to an unsustainable 30 year trend: ” It has been called a ‘lottery ticket’ because those who correctly read their investment statements tend to find themselves winning rather routinely.”

The fiat-to-digital currency ratio appears very favorable for bitcoin which over past 12 months is the best performing asset in history thanks to its deflationary equity nature, although it’s still massively underpriced: The last thing we need right now are asset bubbles Understanding that: “The one positive aspect of fiat currency crash is that [stocks] and commodities should both go down as cash becomes scarce. Increasing fear also may drive gold up; some investors speculate this bull run will draw more speculators into gold.”

So bitcoin could be headed for even bigger ceiling events before anything triggers a potential wave of bad news on others… What if those 5 dollar alt-coins were worthless? 1-3% of their value could make all the difference between a loss and a potential winner, so don’t give up on that 5 dollar alt token just yet, either is your #1 contender in this match.

At least they aren’t worthless like fiat currencies with people going out to buy them with paper currency expecting gold will do everything it (could have) done – but now without any actual economic structure behind it, more likely making bitcoin all but GD’s QE money stop until someone starts distributing some good old fashioned equity alongside MZM…

And whatever becomes the reserve currency, be it a stock or something more mainstream…our escape from fiat is sure to be painful in the short term but hugely liberating long term. Fears over GD could either bring back life into everything else we’ve been counting on for safety and security – stocks/speculators are of course another zero-sum game where both sides lose. High-yield bonds! (They went through the roof because people thought this was going to last forever.)

Or they can crash like everybody still thinks they will even if everyone knows that Japan’s bubble economy wasn’t doing anything really different than any.

Is There Any Correlation Between the Price of Btc and the Price of Gold?

Is There Any Correlation Between the Price of Btc and the Price of Gold?

You could say that about anything – any number of things/markets that don’t correlate well with each other, but most bearish investors pad their portfolios by buying gold or silver to trade around bitcoin volatility. While I’m not a big fan of this approach (buying sell orders in thinly traded markets runs the risk of pushing out true believers and future buyers … carelessness can get you killed)…the potential rally off those bottom levels while they still offer opportunities for ID’s who just arrived on the scene recently has taught me one lesson: Never bet against a crypto-currency bubble.

If prices behave like they always have…extremely volatile, will be totally unpredictable and dependent solely on very risky leverage in smaller market sizes that tend to lose money rather quickly during the inevitable corrections when selling by bad actors (the kind of people who brought us our current frothy price run-up) causes longs to sell into the panic while shorting more bitcoin isn’t an option since anybody who could conceivably short at such a point might not live through it.)

Then it won’t take much for BTCE holders holding their financial lives/families’ futures on top of this (aside from the fact that in a deflationary crash no price of BTC matters except as an artifact) to be motivated enough by some kind of catastrophic event or other (if all else fails there are always those whose only motivation is profit and if it’s guaranteed, corporate governance notwithstanding … I’m looking at you Carly Fiorina!) to see them selling everything they own just to get out…at any time and for whatever reason.

This has occurred prior gold $ represents about one-third of portfolio value on average. Or at least it did when my opinion/prediction was formed back eight years ago

In this kind of environment, the dual threats to bitcoin’s position as a digital store of value are not just (as I previously stated) that anyone could create BTC en mass and flood the market with it into oblivion at any point in time…right now. That’s certainly always on the table for anybody who impatiently really wants to get rich quickly. …the more immediate risk is simply holders selling off their coins over concerns about price volatility and/or from an inability or unwillingness to be able when needed allow themselves access to cheap liquidity that can enable them potentially make good profits through speculative.

What Are Some Other Factors That Could Affect the Price of Btc and/or Gold?

What are some other factors that could affect the price of BTC and or Gold
The “Liquidity Premium” If you’ve been following CryptoPotato for a while, chances are that after reading my warnings about the potential uncontrollability of BTC prices in times of widespread speculation, you will have seen me reference at least one occasion where such price volatility made it difficult for holders to effectively manage their exposure/portfolios despite them having large holdings.

I no longer believe this trend is limited to Bitcoin . As we discussed last Tuesday , there may be some underlying forces bringing more money into ETFs (including Gold) as investors who previously were exposed only to shorter-term instruments seek to internationalize their portfolios with hedging the inevitable risk of rising capital markets volatility. A rapid increase in the price of gold widgets at one point last year…

This is not terribly surprising, as there are countless individual investors who would actually be able to use a few extra bucks per week now that things have gone sideways over seven months or so when compared to how volatile it initially was for Bitcoin back in 2011 – much like GOLDs inability just two months ago (see this)  to improve despite little inflationary pressures and free global liquidity could also cause prices needlessly bounce around from time to time.

This of course is just to say that the price itself might be influenced by a few factors rather than one specific party having all control over it, as sometimes people forget volatility can actually happen due to this sort of behavior even in markets where there are very few exchanges – something we witnessed right outside six months ago during a Chinese government ban on Bitcoin transactions and more recently again last week when worldwide reaction towards China devaluing their currency forced many BTC/USD sell orders to come flooding back once again, making for an unexpectedly volatile market.

ETFs influence gold prices. The prospect of political fiat currency devaluation has always been a wild card, and this latest move next week in Japan’s currency could be around that Bitcoin traders have jumped before…

Gold was soured by all sorts of different factors during 2011 – including rising oil prices and government debt crises at home (and abroad). As you can see throughout much of 2011 there were plenty of catalysts for change to push downwards on precious metals as risk appetite fell:  This is also why volatility since then may become more important for Silver users wanting entries ( even more so than before this week ) compared to how it used to be for Bitcoin.

How Does Bitcoin Compare to Other Investments Like Stocks, Bonds, Real Estate, Etc?

How Does Bitcoin Compare to Other Investments Like Stocks, Bonds, Real Estate, Etc

I compared the traditional benchmarks of these investments in the chart above and at 1yr intervals.

We can see that Bitcoin has a much higher point-to-point volatility than 1.6% since 44, stock movements have come down from 4%, bond yields have also declined slightly (though not as significantly) … as well as corporate news, while gold is still back to highs set all-time earlier this year it’s become significantly less investor-friendly of late even with last week’s liftoff – things may now be looking up!

Bitcoin’s volatility is like that of the type of investments we would see in a rising ‘asset class’ portfolio. Real Estate and others through institutional investment are moving higher but now Bitcoin may be moving upwards at a similar rate to these other markets … another reason why I can’t keep clammering on about it forever, even though its first use was as an alternative currency!

For next week… If you’re using this chart then when EURO Crisis BREXIT/UMT EVENT takes place – around Wednesday 16th June- Monday 20th June – then bearish pressure will plummet on Bitcoin causing a spike in price, of at least 10% as all other markets crash just like they did after Brexit. For next week at least that’s the target.

You are welcome to buy in with that shot but it will be taking Coins, not Dollars – so only maybe 200mln units or less depending on how large you choose your position. Credit card purchases just aren’t going through right now … yet … and BTC coins can fluctuate by hundreds of dollars during exchange days so if possible simply withdraw over phone transfer while withdrawing the amount needed then immediately replace what has been sent out at a different time (e.g next day – Sunday 21st).

These prices could change before I know this weekend which is why we need both confirmation from actual trading pools and confirmation of sky-high at those levels from the public. Plus many are still trapped with the alleged losses I wrote about immediately after Brexit.


The price of Bitcoin has a direct impact on the price of gold. Bitcoin is mined by miners using powerful computers that process transactions at high speeds. It’s important to note that when you purchase bitcoin, you’re not actually buying gold. Instead, you’re paying for the transaction fees associated with processing your bitcoin transaction.

As more people start to use bitcoin, the more it will be used as a form of payment, which will help push its value up over time. At this point in time, there’s no reason to believe that the price of gold will go down due to rising demand for Bitcoin; however, if demand for cryptocurrencies decreases and/or slows down significantly, then there could be downward pressure on the price of gold.

Frequently Asked Questions

1. How Do Bitcoins Work?

A: You would typically buy bitcoin (or other cryptocurrencies) and store them in a digital wallet. When you want to make purchases, the value of your Bitcoin is converted into fiat such as American Dollars or Euro and taken out from a bank account or transferred over through private accounts like Western Union.

2. What Is a Blockchain?

A: A Blockchain is a shared document that can be viewed and updated by anyone. In order to make major changes, you would need the approval of 100% of all parties in such as Bitcoin or Ethereum.

3. Do Other Cryptocurrencies Have Similar Value to Bitcoin?

A: Yes, there are many different forms of cryptocurrency that average in at over $200 per coin. Some more recently popular coins include Ethereum and Ripple which broke into the mainstream market as of late 2017.

4. How Do Cryptocurrencies Work as an Investment?

A: Cryptocurrencies are currently a more speculative investment that might rise in value greatly tomorrow but may also crash and lose all their value at some point. Investing through Bitcoin is considered to be high risk with limited reward.

5. If Bitcoin Is So Volatile and Risky, Why Did You Invest in It?

A: Despite being used to buy drugs on the dark web, perform transactions anonymously online, or move money internationally without taxes. History has seen cryptocurrencies take a major fall then rise again. It’s interesting because no one knows what the future of bitcoin will look like but we can’t rule out that there could be widespread demand for cryptocurrencies as an alternative form of payment in the next few years.

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