A BlackRock Strategist Says Bitcoin Will Replace Gold

Bitcoin is here to stay and to a large extent will take the place of gold because it is more functional than “passing gold bars around.” Those were the words of Rick Reider, the Chief Investment Officer (CIO) of Fixed Income at BlackRock, in an interview with CNN’s Squawk Box on Friday, Nov 20.

The New York-based firm manages over $7.5 trillion worth of assets. The global investment firm is the world’s largest asset management firm. Rick’s endorsement of cryptocurrency and Bitcoin is another validation from a Wall Street executive.

Nonetheless, Rick remained cautious saying he isn’t a Bitcoin bull and doesn’t include the cryptocurrency in business or corporate portfolios.

At the time of writing (Nov 23), Bitcoin is trading at $18,486, gaining 16% in the last week.

Bitcoin Gained +9,000,000% in the Last Decade

Gold remains a preferred safe haven for central banks, governments, and conservative traders with developed markets. Despite the availability of trading portals like Liber LTD, gold’s supply is infinite. Additionally, the launch and rise of Bitcoin presented alternatives for investors. Although volatile, Bitcoin is one of the top-performing assets.

According to Bloomberg, Bitcoin gained over 9 million percent in the last decade outpacing gold’s market performance. In 2019 alone, Bitcoin gained 96 percent, recovering from 2018 lows of $3,200. During this time, gold added 10.8 percent.

On the other hand, gold’s market cap and history make it a preferred vehicle for traders and investors who want to participate in a regulated market. Besides buying marked bullions from approved dealers, traders can also trade instruments like Contracts for Difference (CFD) through a regulated platform like Liber LTD.

Liber LTD is a currency exchange platform with over 500,000 users, authorized and regulated by the Belize Securities and Exchange Commission. In 2025, the trading platform plans to launch an IPO in the New York Stock Exchange (NYSE). As part of its long-term development plan, the team is working towards that goal. Once listed, they will change the structure of their native currency, Liber token (Libfx), into their stock.

The Liber Token (Libfx) is an ERC-20 token with a total supply of 35 million. Liber LTD plans to use the token to initially raise funds. However, the token is tied to the exchange’s performance. It is used to pay trading fees. Libfx holders also enjoy discounts and other promotion programs. Once listed in the NYSE, holders will have rights to purchase the Liber LTD stock.

Liber LTD is also leveraging blockchain technology. To prevent hacks, the exchange will archive their trading information and statistics in a private blockchain. Also, by using distributed ledger technology (DLT), traders are protected from hackers and all their operations remain transparent. Liber LTD has also integrated artificial intelligence (AI) and Big Data for security and data storage reasons.

Bullish Analysts

While gold has a well-developed market with a market cap of over $7 trillion, analysts are confident of Bitcoin’s prospects. Mike McGlone, a Senior Strategist with Bloomberg, predicted Bitcoin’s price to reach $100k in five years.

According to a BTC Peers report, Bitcoin still has enough space for growth citing previous price performance specifically when the digital asset’s price rose from $1,000 to over $18,000 in less than a year.

In an institutional newsletter, Thomas Fitzpatrick, a Citibank executive said the Bitcoin price could rally to $300k in the next year. He explained that the 2010 to 2011 Bitcoin price rally had some close similarities with the gold market of the early 1970s. Based on the technical analysis of the weekly chart, it is his view that the Bitcoin price could rally 16X from spot prices in the next 12 months.

Unlike gold, Bitcoin has a fixed supply in a network that’s transparent and censorship-resistant. Additionally, the digital asset can act as a store of value, a medium of exchange, and can be self-custodied. It is the store-of-value characteristic of Bitcoin that could explain the sharp rise of prices in 2020.

Coronavirus Intervention Measures and Inflation

Amid the effects of the coronavirus pandemic, governments across the world urged central banks to embark on a loose monetary policy and packages.

The Coronavirus Aid, Relief, and Economic Security Act (CARES) in the United States dispensed $1,200 to vulnerable citizens whose annual income was less than $99,000. Meanwhile, the low-interest rates and bond purchases by the FED, the European Central Bank (ECB), and the Bank of England (BoE), set the pace for other central banks to debase their currencies.

Given the digital nature of Bitcoin, its inherent properties, and the performance over the last few years, institutions and high Networth investors are closely tracking Bitcoin, not gold. MicroStrategy, a NASDAQ-listed company, has invested $475 million in Bitcoin.

Square, a firm associated with Jack Dorsey the CEO of Twitter, also bought $50 million of Bitcoin to protect themselves against inflation. It is because of inflation fears and the “fundamental problems with gold” that the Winklevoss Twins said Bitcoin can also rise to $500k.