David Dietze was on Bloomberg discussing bitcoin and gold recently and he noted that gold had been basically flat for the last decade. When people talk about inflation they often think gold and with all of the discussion surrounding inflation, hyperinflation, rising prices, production issues lately, some might wonder why this hasn't been more beneficial for gold yet.

After all, precious metals have stood the test of time for thousands of years, he notes that everything else right now is at ATHs in the market including bitcoin and for this reason we might anticipate that people will come eventually flooding into gold. But will they?

At some point he says gold will move, but why wouldn't people just go looking for something they might find more convenient like bitcoin? Dietze said that the "1% have bitcoin?"... but he suggested that for millions or billions of people in the world who don't have access to a bank or a smartphone that gold will likely be the one they turn to.

Will it? How are they going to get that gold if they don't have a computer or smartphone to make the purchase, will they walk or take a car to get it from a store? Are they going to buy it off of a family member or friend direcly? Isn't that to start with a little more inconvenient than other options if they need to venture far from their home to find and buy it? And if they have money for gold then why wouldn't they have some money for a smartphone? Why should we assume gold would be the best option for those folks? These days buying gold or silver isn't any easier than buying bitcoin in most cases.

Some stats place smartphone prevalence around the world at about 80% and for those who don't have a smartphone, again is gold the best option for them? Is that going to be the convenient choice that they opt for? Already in El Salvador we have seen bitcoin wallet growth increase rapidly and there are now more with crypto wallets than traditional bank accounts.

bitcoin just for the 1%?

Data from 2020 suggested that there were 800k wallets with at least 1 btc, with the average value of transactions fluctuating greatly over the years. There is a great deal of institutional funds in the bitcoin market but this doesn't mean that it isn't open to and being currently accessed by millions of individuals who aren't in that group. Whether spending $2 million or $20 the crypto market is open to individuals from all different economic backgrounds. There are tens of millions of wallets in the crypto market and it's estimated about 13% of Americans alone traded crypto in the last year..not just the 1%.

Bitcoin has frequently been referred to as digital gold and on more than one occasion it has been suggested that its market cap might increasingly expand and perhaps take some of that value which might have went into gold. Do you think if bitcoin or crypto hadn't been around in the last decade that we might have seen gold move more than we have seen in that time? This could suggest that many people are already choosing bitcoin over gold and maybe from that we can expect they will continue to do the same.

not financial advice