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21 sats \ 4 replies \ @OT 8 Oct \ on: YTD gold has increased in market cap by 3.5 bitcoin market caps. We are early bitcoin
Since around 2020 there's been a lag behind gold. Anyone have any idea what explains that? Is it gold has stood the test of time and isn't going away any time soon, where as Bitcoin is still a "just in case" hedge to gold?
Gold is institutionally collateralized, when gold goes up that means even more dollars can be created as loans against it, a percentage of those dollars find their way to Bitcoin which has a smaller float (higher multiplier). Flywheel effect.
Since people started talking gold parity, which would have been at 10x over most of the last year or so, its now more like a 15x in the last few months.
ETF's/MSTR debt etc are an early form of institutionally collateralized BTC, the catch-up is when BTC's little flywheel becomes a money printer unto itself like gold. The suddenly part.
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Thanks for this. More sophisticated than my Bitcoin price is easier to manipulate than the gold price idea.
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The smaller the beachball, the easier it is to keep it under the water.
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Not sure, but the lag certainly exists.
My best guess, gold gets bid up when there are general worries about the economy and/or fears about monetary debasement (people go risk off).
Eventually those fears subside and people want to move "risk on" which they consider bitcoin to be so there is a rotation.
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