My tinfoil hat is on and this is why gold is still a better hedge against chaos than Bitcoin
I have been thinking about this post for a while.
I actually believe gold, in its physical form, is a better safe-haven asset than Bitcoin. To some extent, this debate is raging right now. Is Bitcoin the future of diversification? Is it the new safe-haven asset? My reasoning is pretty simple.
I think when it comes to any safe-haven asset, the most important thing is to own something that is furthest from all your other core assets. But not by the traditional means where one might add a Brazil ETF and some Treasury Bonds to their portfolio of US stocks, but instead by means of diversifying assets based on their physical nature.
I don’t think enough people are thinking about that. Consider for a second at how we are all leveraged long the Internet. Our social profiles, our banks, our stocks, it’s all stored digitally. Going long Bitcoin as a safe-haven asset still leaves you and the majority of your assets attached to one thing: the interwebs and its wild ways.
Yes, you might be buying Bitcoin as protection against currency fluctuations or Government turmoil, and that does make sense from an investment standpoint considering it’s totally decentralized. But you’re investment is still dependent on connectivity. Physical gold, however, is a hedge against any Internet crash or outage. Its store of value is right there in your hands. It does not need a medium or network to survive like the majority of your assets now do.
And that is why gold is still the better safe-haven asset and way to diversify. Because it is one of the last remaining ways to hold assets that are not dependent on the thing that’s delivering this post I wrote right to your screen.