Gold is old, cash is trash, and Bitcoin is king

There was a time when it made sense to hold gold in one's portfolio. It was the de-facto choice for a store of value investment.

The schmuck insurance that was most readily available to be held in one's portfolio.

Just in case this whole un-backed fiat experiment eventually failed, which it was destined to anyways, portfolios wouldn't be absolutely wrecked as things priced in that worthless fiat would be pretty much priceless by extension.

However, we are now coming to a point where gold is just old.

I'd have to get the exact numbers, but something to the tune of 90% of it's value comes from its use case as a store of value investment. It has tremendous industrial properties but that only accounts for a small percentage of its total value.

There is a very real chance the the demise of the dollar has already begun.

Again I'd have to get the exact numbers but I read a statistic the other day about the average length of time a fiat currency has enjoyed world reserve currency status throughout history.

That average came to something like 92 years.

With the dollar we are already past that point.

This would indicate the dollars days are numbered based on historical trends.

So, if the dollar is set to decline over the coming years for a host of reasons, not just related to a historical trend, then things priced in dollars should do well.

Ok, so gold should do well then! Nope, not relatively speaking...

(Source: https://www.pinterest.com.au/pin/337347828314043087/)

When it comes to investing, the you want to own the fastest horse, and if not the fastest horse you want to own one of the fastest horses.

Basically you just don't want to own the slowest horse.

While bitcoin has enjoyed its status as a store of value, that status is set to change going forward with a better store of value available, and that's bitcoin.

Bitcoin is better than gold on literally every metric except its track-record/history as a store of value. It's the only metric gold has on bitcoin currently.

The largest hodlers of gold currently are central banks and then large wealthy institutions/families etc. These investors have a portion in their portfolios which consists of store of value investments.

Gold makes up a large percentage of that portion of their portfolio.

However, as they add the better store of value in bitcoin, their allocation to gold will have to drop to keep the same portion of their portfolio in store of value investments.

For example, lets say a fund has 3% of its holdings in gold, and they decide they want to take a 2% allocation to bitcoin, in order to do that will they will drop their 3% allocation in gold to 1%. This is just a very crude example to give you an idea of what is coming.

The more popular bitcoin gets, the less popular gold will become as a store of value, again relative speaking.

Gold could go up in dollar terms, but will greatly under-perform just about everything else going up in dollar terms.

That is why not only will gold be the slowest horse in the store of value investment race, but it's likely to be the horse with the broken leg and bitcoin's loading the shotgun.

Once these large holders of gold start to transition to bitcoin, the under-performance of gold will be even more apparent than it is already.

Gold is simply old, cash is trash, and bitcoin is king.

See you north of $10 trillion market cap for bitcoin in the not too distant future!

Stay informed my friends.

Image Source:

https://grizzle.com/2020-the-year-bitcoin-became-investable-for-institutions/

-Doc