Gold represented hard money, but it failed, bitcoin is hoping to succeed where gold couldn't...

Bitcoin is trying to do something that gold could not.

Be a truly free money.

Free from central banks, free from governments, and even free from borders.

Yesterday marked the 87th anniversary of when the president of the United States banned gold ownership:

(Source: https://twitter.com/danheld/status/1256322971985039360)

Bet you had forgotten that May 1st also had other meanings besides it just being "May Day" in many parts of the country...

This action would ultimately lead to the destruction of the idea for gold ever being able to fulfill its original purpose, at least at scale.

Gold is old...

People previously held gold as a way to guard against inflation and as a store of value.

It is a rare metal, of limited supply, that has universally been used as a form of money/value for thousands of years.

However, gold is old.

What happened 87 years ago pretty much guaranteed that gold could never do what it actually set out to do, what many people have been using it for.

It could never be free money.

There were other reasons of course, but the ability to outlaw said money means it could never actually work at scale.

That is where bitcoin comes in...

Yes bitcoin can also be banned, in theory, but it is much harder to implement than a ban on gold is.

Bitcoin basically lives in the digital world.

In order to ban it, you would have to figure out how to track and surveil the digital activities of every person in the world.

Not just your country, but in the entire world because, as mentioned above, it's border-less.

On that, Vladimir Putin said it best just recently...

“The question you’re asking is formulated incorrectly because Russia having its own cryptocurrency is impossible.

Just as it is impossible for any other country to have its own cryptocurrency, because if we are talking about cryptocurrency, it is something that is beyond national borders.”

(Source: https://twitter.com/APompliano/status/1255160696461037574)

Plus, you can literally carry millions worth of it around on a drive in your pocket if you wanted, something impossible with gold due to its size and weight.

The shift is already happening...

We just witnessed perhaps the greatest liquidity crisis of this past decade in the coronavirus pandemic.

Financial markets were roiled and just about everything sold off.

Including both gold and bitcoin.

Since that time many assets and markets have regained much of those initial losses.

Gold is widely regard to be a store of value, but it's being bested in one of the largest risk off environments we have seen in the past 10 years:

(Source: https://twitter.com/danheld/status/1256661827930320896)

Year to date returns show bitcoin up 23% compared with gold being up 12%.

Not a perfect comparison I know, but it goes to show that bitcoin is already working as a store of value and likely to continue to take market share away from gold as we move forward.

As time goes on it will be all the more apparent that bitcoin works better as a form of money and as a store of value compared with gold.

And considering that gold is an $8 trillion dollar market, it becomes easy to see where some of the new money investing in bitcoin is going to come from.

Stay informed my friends.

-Doc