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Crypto Trader
Gold tends to go down or sideways for decades at a time, so buying this dip risks years of dead money. History has not been kind to those who buy gold late or on the way down; it sat near $400 and then just above $1,000 for long stretches. Dip buyers may sell at breakeven in 2045 as gold catches up to an S&P 500 at 36,000. Gold could be in a new paradigm of currency debasement, but few assets show the agony of opportunity cost like holding it for 15 years. x.com x.com x.com x.com x.com x.com x.comÂ
Bitcoin should outperform gold by at least 3x over the next few years as the BTC/gold ratio nears breakout. The pair has formed a multi-cycle ascending triangle since the 2017-18 cycle, and after about seven years of compression it sits near the apex; the longer a pattern consolidates, the bigger the breakout. Bitcoin is still massively underowned for its liquidity and market size. Gold should still do well as Fed money printing brings inflation, but bitcoin will be the faster horse. x.comÂ
Gold is set to take off as energy-driven stagflation traps the Fed and negative real rates favor it. Today's dovish hold was likely its last chance to hike: once the AI bubble bursts, the Fed loses that option, while current debt-to-GDP rules out Volcker-style hikes without fiscal insolvency. Per Macrotrends' chart, gold rose eightfold from its 1976 low to its 1980 high, equivalent to $32,000 gold over five years in today's terms. x.com x.com x.comÂ
Gold has formed a multi-year top at $5.6K and won't return there before 2030. It is in a high-timeframe distribution phase, with trillions of dollars rotating out of gold into US equities, bitcoin and Chinese equities, fueling the next risk-on environment. Silver showed a classic blow-off top, and the same applies to gold. x.comÂ
Gold and bitcoin should benefit from debasement as the US government, now the least credible it has ever been, faces higher borrowing costs that make its growing debt harder to finance, leading to money printing and more inflation. Bonds' risk-free status is eroding as the 10-year signals rising inflation and Fed hikes fail to slow a hot economy or fix an energy supply shock. x.comÂ
Gold and bitcoin are winning investor interest as the dollar's status comes into question, as ETF flows in this rotational market show. Investors are buying the dip in semiconductors, selling the rally in software and warming to gold and bitcoin. x.comÂ
Gold's roughly 2% annual supply inflation compares badly with Bitcoin's diminishing supply inflation, a projection gold bugs refuse to make. A post the author replies to adds that about 95% of all Bitcoin has already been mined, that gold mining uses far more energy, and that gold's value against Bitcoin keeps falling over time. x.comÂ
Gold looks set to keep benefiting as nations diversify into scarce, neutral assets outside other countries' liabilities. Central banks just made gold the world's top reserve asset, overtaking US Treasuries for the first time since 1996. Russia's frozen reserves in 2022 showed that foreign financial assets carry geopolitical risk; now 74% of central banks expect the dollar's reserve share to fall over five years, and 89% expect their gold holdings to rise. x.comÂ
Gold, silver and bitcoin are set to run as the QE money printer heats up. x.comÂ
Bitcoin has seen only a fraction of the flows rotating out of gold into it. Gold has yet to go through all its price-pain capitulation, and then comes a period of time pain. x.comÂ
Bitcoin benefits as the risk of creating gold through alchemy has entered public consciousness. That perceived threat to gold's scarcity supports a long Bitcoin position as a persistent theme. x.comÂ