Despite going through a robust bearish streak throughout this year, Bitcoin (BTC) is on its way to consolidating itself as the digital equivalent of gold and is actually strengthening every day.
According to an article by Mr. Alex Gurevich, CIO at HonTe Investments and former JP Morgan advisor there is an analogy between gold and Bitcoin. For Gurevich, from an economic and historical point of view both share the same characteristics that have made them the value storage means par excellence in the worldwide financial markets:
Amidst precious metals, however, gold is neither the rarest (platinum and palladium are harder to come by) nor quite common, like silver …
My guess is that over many centuries, the precious metal has hit it’s “golden” mean; it is common enough to be a worldwide currency, but not so common that mining can disrupt its price.
Bitcoin: Age is an Advantage
In the same way, there are cryptocurrencies with greater supply, and many others have fewer tokens or even greater mining difficulties, but BTC has a clear advantage that makes it the crypto-king: time
Lastly, why bitcoin specifically? It has been discussed ad nauseam why bitcoin mining qualities and limited supply gives it aspects similar to gold. But its unique advantage with respect to other crypto-assets is that was there first. And now it is in the process of outlasting the competition.
Altcoins Are Healthy and Help BTC Grow
He also commented that just as Bitcoin is digital gold, there are other cryptocurrencies with equivalents in precious metals. The most obvious analogy according to Mr. Gurevich is to be found in ETH (the cryptocurrency of the Ethereum network).
For the expert analyst, BTC is digital gold, and ETH is digital copper. The difference between the two is that the demand for the Ether depends on its use from a technological point of view whereas “the price of bitcoin (is driven) by the need to store liquidity.”
Likewise, he commented that the decrease in market dominance due to the rise of altcoins is not a reflection of Bitcoin’s decline in popularity but a positive factor not only for its value but for the entire ecosystem:
As a corollary, the rise of altcoins geared towards specific purposes is not at all dilutive, but actually supportive of bitcoin. While diminishing its share of trading volume in actual transaction flows, it shields bitcoin from being demand driven and makes it a more attractive store of value.
In this way, Gurevich, who also has a Ph.D. in Mathematics contradicts the arguments of several critics of Bitcoin such as Roger Ver who mention that the increase in the volume of Altcoin trading is due to Bitcoin losing strength.
What Doesn’t Kill You Makes You Stronger
Gurevich explained that the behavior in BTC prices is similar to that observed in other precious metals such as Gold and Platinum, adding that “every time it survives and stabilizes, it (BTC) gets extra “gold cred.”
Gurevich concluded with a word of encouragement to the community. Like gold, Bitcoin grows stronger every day and is on its way to becoming a permanent storage medium of globally accepted value:
In summary, despite the rise and fall of various altcoins and fork considerations, “time” works FOR bitcoin, not AGAINST it. Every day it doesn’t disappear, it gets one step closer to a permanent status of digital gold.
A Nice Debate
Although the article has been circulating on the Internet for quite some time, its validity is indisputable, and in recent days has generated an interesting discussion in the crypto ecosystem.
Ray Matz, a reader, commented that like gold and any other good with monetary value, Bitcoin does not escape the natural laws of the market or the current reality of the business world:
All forms of money are owned by a very small community. 1% of the people on this planet own 99% of all exchangeable value including the most valuable fiat cash, stocks, real estate, and metals. That same 1% will own 99% of any new exchangeable value including Bitcoin or whatever comes behind it. When you hold cash or stocks or Bitcoin now, you are swimming in their pool.
Bitcoin doesn’t play by their rules. It is not the 1% compared to stocks or real estate yet and may never be. There is 10x more stock value in the world than there is fiat. There is 1000x more stock value than Bitcoin value. To most holding 1% of value, Bitcoin is playing the dreamer, scammer, or disconnected role. To a small degree, those having Bitcoin could sell and buy real estate or stock, but how much could they buy? They couldn’t hold 1% if they tried. Is there any Bitcoin holder that can sell and own 1% of Apple, Amazon, and Microsoft? No. Could the largest holders of those companies own 1% of Bitcoin if they wanted? Yes
Cryptopanic user “ElectricAssasin” simply said “Now it’s the best time to enter in bitcoin” something that seems to be corroborated not only by Gurevich’s words but by the long-term technical indicators, with an extremely attractive RSI and a strong support that has been tested during the month of November, especially after Bitcoin Cash’s hard fork.