right. So why does it hold value when shit hits the fan? you can't eat it, you can't treat a disease with it. Will it hold value in the future? My point is, it's really just convention. So, the same logic applies to bitcoin.
yes, these differences are reflected in the market caps. But just cause some convention is 5000 years old, it doesn't mean new convention cannot overtake it. Bitcoin is 7 years old and doesn't seem to be going away.
right. It has less convention than gold and less valuation. Bitcoin market cap is what 50-70 billion?. What is the non-industrial fraction of gold's market cap? 1 trillion? so, if bitcoin permanently stays at 10% of gold's hedging value, it justifies a valuation of 100 billion. that's not counting at all usefulness of bitcoin for money transfers.
there is no reason yet to think that. But my point is it could become that hedge. Because there is no fundamental reason for gold to be treated as that hedge. So, my point is, the fact that there is no fundamental reason to use bitcoin is not really a great argument against it. Because there is no fundamental reason to use gold and it is used anyway.
gold is also volatile and has had 25% pullbacks. Plot gold over time and you'll see. Hedging is not about the volatility per se but about correlation with other investments.
anything could not be a hedge. It needs to be liquid, transferable, international, etc. etc. bitcoin is on the way there. I am not saying it will supplant gold, I am saying it could. that probability is certainly not zero.
Well likewise when they were $0.50 a piece I toyed with the idea of getting some, just in case.
That doesn't mean I think they're a reliable investment or comparable to gold, just that in hindsight I could have been very rich by for a few bucks back then.