4/17 ANDY HOFFMAN (CryptoGoldCentral.com): Rhodium to Bitcoin’s Gold

in andyhoffman •  6 months ago

Per the long-standing relationship of gold and silver - in which silver has been considered “poor man’s gold”; Charlie Lee created Litecoin with a view of it being “crypto silver to Bitcoin’s crypto gold.”

Litecoin has been a wildly successful venture, in establishing a network effect second only to Bitcoin, and stability that ensures it will last indefinitely. Typically, Litecoin’s valuation has been around 1-2% of a Bitcoin – which coincidentally, is about what silver’s valuation is relative to gold.

Unfortunately, with Bitcoin’s network effect growing faster; with stronger security, and “cryptodividends” like BRhodium adding to its “yield”; it’s difficult to see how Litecoin’s valuation relative to Bitcoin can materially rise in the coming years. Similarly, silver has seen its valuation relative to gold decline for years – which is why, among other reasons, I sold my silver this summer. In fact, the major catalyzing event for selling the remainder of my silver – and Litecoin – was the activation of SegWit on Bitcoin – as afterwards, I saw no way either could compete with Bitcoin’s superior monetary properties.

This winter, I sold my gold, too, for the very same reason. However, given its stronger investment history, I expect gold to maintain monetary value indefinitely - despite its inevitable usurpation by Bitcoin. Conversely, I now view silver as a glorified base metal, that can only regain monetary value if a worst-case, apocalyptic inflation scenario arrives…at which point, it would still underperform both Bitcoin and gold.

When BRhodium is launched – likely, in the next few weeks - I believe it will take Litecoin’s place as the “crypto silver to Bitcoin’s crypto gold.” However, now that I have lost faith in silver’s monetary value, “crypto Rhodium to Bitcoin’s crypto gold” seems more appropriate…as not only is Rhodium the scarcest of the Precious Metals; but recently, the best price performer.

Thus, while Litecoin should continue to maintain a 100% directional correlation with Bitcoin - just as silver does with gold; I believe BRhodium, not Litecoin, is likely to be viewed, in time, as the number two “crypto monetary asset.” The process will take time to play out – for investors to learn of it, feel comfortable with the network’s security, and build trading liquidity…but in time, I view this outcome as very possible – which in turn, could give it a premium valuation relative to other crypto assets.

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!