Bitcoin VS Gold
Elon Musk one-word tweet sends bitcoin on a wild ride the fireworks obscure what should be the real purpose of cryptocurrencies.
Hello i'm Vijay Bharwad and this is what's ahead where you get the insights you need to better navigate these turbulent times a one word tweet on sunday from Elon Musk and Bitcoin loses 135 billion dollars in value a quick follow-up tweet appearing to contradict the first and bitcoin recovers some of the losses remarks by dogecoin fan mark cuban meaningfully moves this cryptos price cryptocurrencies have surged since 2020 for instance dogecoin originated as a joke has a market value today greater than 75 of the companies listed on the S P 500 fans say cryptos like bitcoin are a new inflation hedge and store of value but there is no history here like you've had for 4000 years with gold and the dizzying gyrations make kryptos look like speculative vehicles especially as many traders are now employing derivatives meaning they can in effect take a position and save bitcoin by paying only a fraction of the price this adds to the volatility.
The real price of a cryptocurrency ought to be as an alternate to government issued cash that's having the ability to use a crypto for business transactions short term and long paypal and others are making great strides enabling consumers to use cryptocurrencies in their digital wallets to buy and sell products and services but this means a crypto must have a stable value it can't be a roller coaster a gallon of gas that costs the equivalent of three dollars one week can't be selling for the equivalent of thirty dollars the following week there is a new class of cryptos called stablecoin that are tied to a specific asset the best would be gold or the swiss franc which has kept its basic purchasing power better than any other currency for the past 100 years gold for a variety of reasons has held its basic value over the centuries better than anything else better than other metals and certainly today's crypto currencies gold is a time tested inflation hedge the fluctuations in the price of the yellow metal reflect changes in currencies just like the dollar not of gold itself different challenges area unit group action fees that area unit still too high and tax collectors touch you with a capital gains tax if you use a crypto that has risen in price in terms of the dollar moreover governments will react fiercely when cryptos do indeed become easy to use alternatives to their own money in the meantime enjoy the fireworks but stand aside i'm Vijay Bharwad thanks for reading do send in your comments and suggestions i look forward to being with you soon again.