Forum Topics Bitcoin as an investment
Remorhaz
Added 2 months ago

Gold and Bitcoin


A paper recently released by Campbell Harvey from Duke University

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5530719

Abstract

Bitcoin is often viewed as a potential competitor to gold as a safe-haven asset. But is it? While gold and bitcoin share similarities - decentralized supply, low inflation, costly mining, and no cash flows - they have important differences. Bitcoin faces two risks that gold does not: the threat of a quantum-computing attack and the more serious possibility of a 51% attack wherein an entity seizes control of the network by amassing sufficient computing power. Gold, in turn, faces its own unique set of risks tied to potential supply growth from "modern alchemy," among other new on-and off-world sources. By contrast, bitcoin's supply is limited by its algorithm. 


Larry Swedroe also wrote a piece for Morningstar discussing the findings:

Gold vs. Bitcoin: Why the safe-haven debate is shifting in 2025


https://www.morningstar.com.au/markets/gold-vs-bitcoin-why-safe-haven-debate-is-shifting-2025

Key takeaways for investors

  • Gold remains the go-to safe haven: In 2025, gold has lived up to its historic role, attracting flows in times of stress even as bitcoin underperformed.
  • Bitcoin is riskier in crises: Investors seeking stability still cannot rely on bitcoin in the same way as gold, due to its correlation with risk-on assets and susceptibility to unique technological threats.
  • Diversification, not substitution: Bitcoin may still serve as a diversifier in portfolios, but it should not be viewed as a substitute for gold as a crisis hedge.
  • Stay alert to trend changes: Shifts in the correlation between gold and bitcoin prompt regular reassessment of portfolio allocations and risk management approaches, especially as new regulatory and technical developments emerge.


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Strawman
Added 2 months ago

Campbell is embarrassing himself with these risks @Remorhaz. Maybe they held water in 2015, but they have been so thoroughly debunked at this point as to be comical in there assertion.

I wont go into too much detail, people can dig into them if interested, but in short, a 51% attack would require spending (at least) $6 billion and assumes that demand could be met instantly and without massively distorting the market for ASICs. Besides, even if successful, all a 51% attack does is essentially allow the attacker to block new transactions (they can’t steal or forge coins, spend coins they don’t own, rewrite history, change the 21-million cap, or alter the consensus rules) and the second they stop the system goes back to normal. It's just not realistically possible at this stage.

As for quantum, it's not the dunk that people think it is. For one, it pretty much breaks EVERYTHING so its just as much a risk to your current bank balance (which is, in fact, orders of magnitude easier to hack). Moreover, we dont yet possess the technology and best estimates put it at least a decade away. But even if it did appear tomorrow, the network can easily upgrade to a quantum resistant signature scheme (functional solutions have already been developed and nodes would simply upgrade as needed).

People can (and should) verify these assertions. But if you take the time to examine them in good faith I'm confident you'll reach the same conclusion.


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raymon68
Added 2 months ago

USD Bitcoin:

Chart says the story. Positive Sentiment for the growth equities are on edge..

Chart 1 year, 1 week period. A big drop from 101k to 92.6k this morning


7ba22f7a687a55c14573efafb644483614e075.jpeg

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Strawman
Added 2 months ago

Meh, totally normal

¯⁠\⁠_⁠(⁠ツ⁠)⁠_⁠/⁠¯

74af478b42ab7786f3eb1686ac8b2346fe9acb.png

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Strawman
Added 2 months ago

A central bank buying Bitcoin was not on my 2025 bingo card.

https://www.cnb.cz/en/cnb-news/press-releases/The-CNB-creates-a-test-portfolio-of-digital-assets/

Yeah, it's just a tiny amount as a test. But noteworthy.

24
Strawman
Added 2 months ago

Square just rolled out native Bitcoin payments across its platform, which i think is noteworthy.

A.good article here from Parker Lewis

Square have millions of merchants using their POS globally, with billions in payment volume, and a footprint that spans the US, Australia, the UK, Canada and more. :

Merchants can now accept and settle in any mix of fiat and Bitcoin, all inside the same Square hardware, dashboard and reporting they already use. No new systems or extra friction.

Will be interesting to see the uptake.

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