Bitcoin is paving the way for the reintroduction of gold as global money,” Mr. Naylor-Leyland surmised. Rather than viewing bitcoin as a threat to the precious metal, he instead views it as a way to educate investors. “Bitcoin was explicitly designed to be digital gold. So if you’re going to have a small proportion of a fund in bitcoin, it should be in a gold fund, because that’s exactly the point.”
It’s a curious end-run toward a broader goal, but no one would blame the fund. Bitcoin is up hundreds of percent this year. And since the fund’s reported buying spree in April, the digital currency has risen from just over 1,000 USD to the current floor of above 8,000 USD.
The historic metal has thudded along comparatively during the same interval, up $40 as of this writing.
“Bitcoin and blockchain resolve” divisibility problems, Ms. Pakiam writes of the fund manager’s thoughts, “[problems of] ownership and speed of transmission.”
“We’re going to revert to sound money,” Mr. Naylor-Leyland is quoted. “If you imagine sound money and blockchain together, there’s quite an exciting potential outcome.”
It’s a novel approach to bitcoin, for sure. Crypto maximalists suggest it’s simply a matter of time before the digital currency overtakes gold’s position. And as well as bitcoin has done in less than a decade, the precious metal has a four millennia headstart.
Something on the order of over 5 billion ounces presently exit, and with an ounce trading above 1,200 USD, that pegs it at a 7 trillion USD market cap, close to 100 fold better than present bitcoin valuations.
Still, the better bet seems to be understanding a larger point: the metal’s limitations were the inspiration behind bitcoin’s creation in terms of scarcity, mining, and utility. They’re not mutually exclusive though: both are preferable to the whims of government fiat, sound money advocates urge.