Everyone is buying money.
Boomerlock has blown up over $3,600 this week, marking fresh, top heights and drawing investors into a wide, glorious trajectory. So why are gold prices soaring? It’s the result of a complete storm. The US cooling labor market, expectations of interest rate cuts, merciless geopolitical unrest, and the central bank diversifies from the dollar.
Just look around: buy Salvador gold, the Brick countries are buying gold, the central banks are buying gold, Aunt Mildred is buying gold. Everyone is buying money. Should you do it?
Golden hedge of El Salvador
El Salvador lighted up Crypto Twitter this week and decided to buy $50 million worth of gold. This was when the Bitcoin crowd asked, “When does the world’s first Bitcoin country need shiny metal as a backup?”
El Salvador’s Mega Gold Buy marks the country’s first gold purchase for the first time in 35 years, and will increase its holdings by nearly a third to diversify its international reserves and increase financial stability, taking into account Bitcoin exposure in particular.
By holding both Bitcoin and Gold, El Salvador is trying to reassure international partners and signal global institutions like the IMF to carefully manage risk.
Despite plausible logic, Salvador’s gold purchases have declined like a bar of $50 million worth of gold among the Bitcoin community. Self-proclaimed Bitcoin Chief Hodler Karl B Menger commented:
“I will remove the flag of El Salvador from my name. Once, the beacon of hope for a better future has become a shadow of disappointment.”
After President Bukel makes Bitcoin the legal currency, he appears to hedge legacy safe havens to buy gold, questioning the country’s Bitcoin conviction and backtracking the “digital gold” story.
Everyone is buying money. Should you do it?
Beyond El Salvador, BRICS (Brazil, Russia, India, China) has increased purchases to historic levels, with the Polish central bank governor planning to increase the gold target from 20% to 30% as part of the country’s reserves.
In fact, central bankers around the world have recently demonstrated a significant emotional shift away from the dollar to gold. As Balaji Srinivasan commented:
“Central bankers are hoping to buy more money.”
Gold certainly spends a moment, but is it a better investment than Bitcoin? Economist and Perma Goldbull Peter Schiff certainly thinks he’ll come out again this week to come to dance prematurely at Bitcoin Tomb.
“Bitcoin has dropped 18%, down just 2% above the official bare market territory since hitting a high of around 37.2 ounces on August 12th.
However, while the fact remains, Bitcoin has the qualities that leave gold in the dust. It is easy to move, difficult to seize, clearly scarce, and global at the speed of light. And that historic profit makes Gold’s victory look stupid. As Crypto Trader Borovik reminded us:
“Gold hit the new $3,600 ATH, which nearly quadrupled from its price in 2009. Meanwhile, since 2009, Bitcoin has risen 11,000,000 times.
Gold’s run is impressive, but Bitcoin’s performance since its founding is legendary, far outweighing the returns of shiny metals.
So yes, everyone is buying money, banks, government, even El Salvador, and certainly Peter Schiff. But Gold is not the only shelter in the storm world.
Bitcoin offers a more exponential price chart than portability, privacy and Golden. With both assets reaching new highs, the choice is sharper and more controversial than ever. Choose wisely.
