Bitcoin + Gold = BOLD

Tesla announced that they had invested $1.5bn in bitcoin and the price duly surged. Markets are more efficient than many believe, and in recent months, the bitcoin price has responded positively to known investment flows more than anything else. Back in the day, Bitcoin would spike on news that a coffee shop accepted payment in Bitcoin, or a minor celebrity liked a tweet.

A million-dollar Bitcoin

I believe there will be a million-dollar bitcoin price; you just need to be patient. $41bn of inflows will easily see a million-dollar-bitcoin, but not until 2044. Add in 2.5% average consumer price inflation and that lands in 2036. Bolster inflation to 5%, which seems more likely than not, and that brings it forward to 2032.

Bitcoin + Gold = BOLD

Combining bitcoin and gold is a good solution. Both assets are long-term stores of value, yet they both have their strengths and weaknesses. One is volatile, the other is calm. One is modern; the other ancient. One requires energy; the other does not. One has utility while the other has little outside of jewellery. Above all, one is an established monetary asset accepted all over the world, whereas the other hopes to catch up.

Gold and Bitcoin volatility

Source: Bloomberg; As described since 2014.

BOLD asset allocation since 2014

Source: Bloomberg; BOLD weights since 2014.

BOLD delivers the best of both worlds

Source: Bloomberg; Bitcoin, gold and BOLD performance since 2014 rebased to $100.

Asset class returns by year

Source: Bloomberg; Annual asset class performance as described with BOLD by year in US dollars total return.

Applied data for digital asset investors. ByteTree provides real-time data, fundamentals, technical and deep blockchain market analysis for Bitcoin, and more.

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