The Gold and Bitcoin Powwow

This week I have written an open letter to Daniela Cambone-Taub. She will be hosting the debate between Frank Giustra and Michael Saylor. These are prominent people in the gold and Bitcoin communities.

An open letter to Daniela Cambone-Taub

Dear Daniela,

Supply and fees

Bitcoin has a fixed future supply, and the growth rate in new coins diminishes rapidly after 2032. Future gold discoveries are also diminishing, but the supply is expected to be greater than for Bitcoin.

Hard money

Both assets make a strong case to be defined as hard money. Bitcoin has some tech-enabled advantages, but gold is inert. Which is more powerful? The certainty that an asset cannot be destroyed or the benefits of technological development?

Inflation hedge

The past ten years have shown us that 95% of Bitcoin’s performance has coincided with flat or rising inflation expectations. For gold, that has been witnessed over the past 5,000 years. Would they agree that Bitcoin and gold are both inflation hedges?


One argument is that Bitcoin has outperformed gold over recent months. Bitcoin has delivered greater performance, but that is in part because it is a youthful asset and is still capable of behaving like a growth stock. Such an asset would do well as the economy recovers and after real interest rates have risen. Conversely, that is never a good time to own gold, which benefits from falling real rates. I suspect that when the bond yield turns down, gold will start to outperform Bitcoin. Recent performance differentials have no bearing on the long-term merits of these assets.


In terms of energy consumption, a gold miner gets paid just once, and the gold is yours forever. Bitcoin miners demand more money every ten minutes, and their demands will continue forever. Since 2009, they have sold an estimated $28bn of Bitcoin. Is that energy really stored as monetary energy, or has that $28bn gone up in a puff of smoke?


Assuming Bitcoin delivers, it has more upside than gold, because, unlike gold, it is not yet fully established. Gold is already widely distributed (jewellery owned by a large part of the world’s population), 10x more valuable (total supply), 10x more liquid, and 3x less volatile. For Bitcoin to catch up, much work still needs to be done. How long would it take before this becomes true, if ever?

Technology and mobility

On the subject of technology, Bitcoin won’t change much, but the service providers and layers on top of it will. Once this technology is refined, is Bitcoin required for collateral, or could it be anything, including gold and other liquid assets that have been tokenised?

Central banks and the establishment

Gold is actively traded between central banks, especially in the emerging markets. They are “value buyers”, which exist in mature markets. When the price is down, the central banks and the jewellers load up. This is an important force that helps gold to quash price volatility. Similarly, when the emerging markets are doing badly, their gold becomes valuable in local currency terms. They take advantage of the high gold price and sell.


What is the chance that either or both assets could struggle due to regulatory pressures? Regardless of how much you prefer one asset over the other, would you agree that a combination would offer greater certainty and protection?

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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