Jeff Clark, Senior Precious Metals Analyst, GoldSilver
Gold or cryptos?
That’s actually the wrong question, as Mike Maloney points out in his new episode of Hidden Secrets of Money. This movie-quality production follows his three-year journey into investigating the cryptocurrency landscape. He expected to find nothing but a digital payment system. Instead…
“What I found is a technology that can revolutionize the planet.”
Gold and cryptos have some strong similarities. But they also have some key differences, which is the reason Mike holds both.
The crypto craze has raised some honest questions and concerns, especially as it relates to gold and silver. Here’s a brief Q&A to the most common topics we see come up…
Why Have Cryptos Become so Popular?
Cryptocurrencies offer users another way to opt out of the current monetary and banking system, and that can be enticing. The technology is also exciting, especially for those that are more tech-savvy.
The more recent reason for their popularity, of course, has been the surge in prices. Some people have become millionaires from their early investments, and that has spurred others to get involved, driving up the price and the number of cryptos in existence.
Why Did Mike Make an HSOM Episode About Cryptos and Not Gold & Silver?
The Hidden Secrets of Money series has been about money and currency, in all of their forms. Cryptocurrencies are the latest form. Over his three-year journey, he came to understand how revolutionary the technology is, as well as how it could impact on our freedom and prosperity.
What’s happening in the crypto sector can’t be ignored. Mike is simply encouraging everyone to understand the technology behind this revolution, and how it might figure into your future. The price of bitcoin gets a lot of headlines, but the technology behind the cryptos is not a fad, and won’t disappear. Mike encourages everyone to investigate how it will have a place in our society going forward.
Why Are Some Gold Bugs Excited About Cryptos?
Because they have some things in common, and serve some overlapping purposes. As Mike says…
“The reason people buy bitcoin and cryptos is the same reason why people buy gold and silver. It’s an alternative to all the fiat currencies that are being printed into oblivion on this planet right now. And they eliminate the need for third party trust—you don’t have to trust somebody else with your bitcoin, you’ll only have to trust yourself. You don’t need to trust somebody else with your gold and silver, you have to trust yourself. So the reasons are the same.”
They’re also both outside the banking system (though that would change if banks adopt the technology).
What are the Advantages of Gold? And Cryptos?
Gold still holds some distinct advantages over cryptos…
A physical gold Eagle in your hand is a tangible form of wealth, while cryptos are essentially ether that rely on electricity and the internet. Cryptos can be hacked (and many have); a gold Eagle cannot. A gold Eagle can get wet; your USB drive gets wet and there goes your cryptos.
Bitcoin and other cryptos are too volatile to serve as a real currency. That may change at some point, but gold has been a stable, long-term store of value for literally thousands of years. Gold has a proven track record of value; cryptos do not. As Mike says, “Cryptos are a speculative and wild ride, but gold is proven.”
Gold is undervalued right now; cryptos are in a bubble. If you’re looking for an investment edge, there it is.
There are a couple advantages that bitcoin and other cryptos have over gold.
Cryptos offer the ability for immediate electronic exchange. They can serve as a payment system.
Cryptos are probably easier to transport, especially in large quantities. Though it’s even easier to move gold around with our new Storage program.
Mike has a clear message to both crypto holders and gold holders:
“I would encourage every precious metals investor to investigate bitcoin and the other cryptocurrencies, and I would encourage every bitcoin and cryptocurrency user and investor to investigate precious metals. I’m going to hold both.”
Should I Buy Bitcoin and Other Cryptos Now?
We don’t like giving investors personal advice, but we are happy to share what we’re doing.
No, we are not buying bitcoin now. It’s clear the price is in a bubble, and a sure way to get hurt is to chase an asset that’s in runaway mode. In fact, Mike has been selling some of his bitcoin to buy gold and silver. That’s because cryptos are overpriced and precious metals are underpriced.
Because of gold’s role as money throughout history, and due to the elevated risks inherent in the financial system right now, we’re convinced the next big asset bubble will be gold and silver. Mike feels no differently than he has all along:
There will be a monetary reset, and gold and silver will soar in that turbulent and scary time. This monetary shift is not far off.
If you don’t have a meaningful portion of your assets in mankind’s oldest form of money, we highly recommend you follow our lead and buy gold now.
Will the Price of Bitcoin and Other Cryptos Stay at These High Levels?
What we don’t know is how high the price will rise in the meantime, how far it might fall, nor when all this will happen. But it’s probably not too far away, given the mania type rise.
Frankly, the crypto markets remind us of the Nasdaq in 1999. Dot-com stocks were all the rage; prices rose exponentially, and many had no earnings. Stories abounded of people quitting their jobs and taking out home equity lines to trade tech stocks. These same things are happening today—which should serve as a word of caution.
It is probably not a good investment strategy to chase an asset that’s in a bubble. There will be opportunities to invest in the crypto sector in the near future, so for now we recommend focusing on your education of this growing sector.
One advantage to buying gold now is that when crypto prices do crash, gold can serve as a buffer against that event, just like it has against stock market crashes. Bottom line, gold should be seen as a strategic asset that can weather whatever storm is coming.
Would Mike Buy Bitcoin or Cryptos Now If He Owned None?
Mike answers that succinctly in the video:
“I look at the crypto currencies as a very speculative, volatile, and potentially risky play. I look at gold and silver just like savings—I see them as something that has never failed in 5,000 years. They are proven. They are also extremely undervalued compared to the morass of fiat currencies around the world right now.”
If you’re ready to swap out some of your crypto gains for physical gold and silver, you can pay for your purchase with bitcoin.
Whatever your opinion of cryptos and gold, Mike encourages everyone to investigate both. That’s because both are likely to play a big role in your future.