By Jim Duffy
I have a dilemma you may be able to help me with. While it’s not a life or death scenario, for many it could mean the difference between being poor or creating generational family wealth.
That dilemma is gold and silver, two precious metals that I own as they have been passed down to me by my parents. Not in gold bars or silver coins, but in the form of jewellery. All I can see is their value deteriorating every year as both of these iconic stores of value lose their shine with the younger generations.
“Out with the old and in with the new” is the mantra of all innovators. Hence, new forms of value are being created. Bitcoin is most certainly in the spotlight as a new precious metal that does not sit on your wrist as a bangle or around your neck as a chain. No, this new innovation has its own chain – the blockchain – where its scarcity and security make it the new 24 carat “must have” for younger investors.
So, while the new kid on the block with only 21 Million coins total capped circulation is making serious gains in value, my gold and silver trinkets are depreciating as they sit unloved in wooden boxes in a drawer next to my bedside.
Peter Schiff, the gold and silver precious metals bug and outspoken anti-Bitcoin rabble-rouser continuously rants on social media and TV that Bitcoin is worthless and “going to zero”. But, closer inspection reveals that silver is about to be “flipped” by Bitcoin in global market capitalisation. Ostensibly what this means is more money is flowing into Bitcoin, while less money is going into silver.
Silver has a global market capitalisation of $1.366 Trillion. It currently sits at number 7 spot behind Alphabet [Google]. But, hot on its heels is Bitcoin with a market cap of $1.115 Trillion. If the Bitcoin bulls have their way, silver could be overtaken by Bitcoin soon, a major milestone for the crypto world.
On 25th February this year Schiff stated,
“Silver is ready to roar…. Silver will go ballistic”
Based on what is happening from a technical perspective, this doesn’t appear to be paying off as Schiff has ordained. It may not even stop here.
Many commentators and analysts have predicted that Bitcoin will leave silver in its wake and eventually replace gold as the number one global asset. From its current position this would be a 10x jump in value to over $19 trillion.
So could this conceivably happen? Five years ago, my answer would have been “not a chance.” But, in April 2021, looking at how the investment landscape has changed and the acceleration of cryptocurrency and digital assets increasing day by day, I’d say the odds are getting smaller all the time.
Anthony Pompliano, a well known and respected Bitcoin investor and advocate recently stated,
“There is a higher likelihood that gold goes to $0 than Bitcoin does at this point. One is growing in value and the other is falling. Don’t get caught on the wrong side of a paradigm shift.”
Pompliano is tuned into the crypto-sphere in a big way, straddling traditional investments with crypto companies. In short, he has his finger on the digital pulse and knows which way the wind is blowing. He may be right…. which means the gold and silver I have, albeit with sentimental value, could be worth a lot less within a few years.
As I said, it’s a dilemma. Trade in my precious metals and buy into new digital forms of wealth? Or take them out their wooden box and polish them every now and then. My dad left me some gold and silver that 30 years ago, were precious and had value to him. But, I’d rather leave my kids Bitcoin or Cardano on a ledger stick.
In closing, here’s the killer question for you all. What would you rather be gifted right now – $1,000 worth of Bitcoin, silver or gold?