A look back through the history of gold reveals some interesting patterns that may indicate what may come next. By which we mean the future price evolution of gold. But whatever the future holds, diversification is never a bad idea. A growing number of people believe that Bitcoin may soon replace gold as a safe haven against a depreciating dollar. Can Bitcoin replace gold as the new safe haven? Perhaps both complement each other.
Of course, this is just speculation, but it’s worth keeping an eye on Bitcoin nonetheless. Apart from the fact that there are a large number of digital coins (assets), what is unique about Bitcoin is the fact that the supply is really fixed. Only 21 million bitcoins will ever be produced. So, since there are an estimated 47 million millionaires in the world, if all of them only wanted one bitcoin, they wouldn’t be able to buy it all. These supply constraints make the market for Bitcoin bullish.
Gold, on the other hand, has been a means of storing wealth for 5000 years and is a real physical asset. Gold has always had value in times of geopolitical uncertainty and has many commercial applications. Gold is inert, which means it lasts for centuries, and when production declines and demand rises, that inevitably translates into rising prices. Whether you choose to lean digitally or physically, at the heart of the debate is a universal distrust of government. We have seen governments spend and print at levels that defy imagination. Against that background, Bitcoin and gold can complement each other as safe havens.