Bitcoin worth more than gold, where to from here?

Bitcoin worth more than gold, where to from here?

This 5 year graph shows Gold in yellow and Bitcoin in blue.

Why is Bitcoin worth more than gold? There are many reasons why Bitcoin is worth more than gold and will continue to outstrip gold.

Gold originally as a rare commodity has been a store of value, used for trade and as a base to back fiat currency. The decoupling of the dollar and gold has had some second and third order effects on "value".

Fiat currency has become a fictitious commodity that has become decoupled from reality, the ability of banks to print more of it has led to its deflation globally, as can be seen by the increase in the price of gold.

Since the GFC of 2008 new market forces and economic theory has been challenged with the evolution of digital currencies.

 Bitcoin originally a quasi experiment/ theoretical answer to 'money' has intrigued economists, trade speculators, geeks and hackers since it's inception. The block chain technology that it is based on, has been it's backbone and as yet has not been broken/ hacked in over 8yrs.

The question of what gold is worth really comes down to it's utility, there is no question that it is a traditional store of value for all it's implicit reasons, such as rarity, utility etc.

But the question really needs to be asked is how much of a store of value is it really and how portable and how much utility does it really provide as a unit of value. Can you buy a t-shirt with gold? Can you go and buy a cup of coffee with gold? can you buy a car from a dealer or subscribe to a internet service with gold? It is cumbersome, hard to liquidate as retailers do not have the ability to value it, shops do not have scales to weigh and price gold, they do not accept it as a currency, in reality it is not very functional at all....

Bitcoin (and other digital assets) have really broken new ground, they are globally accepted, instantly transact-able, totally portable and secure. In the new digital age of global consumerism, travel, political, economic volatility etc, digital assets have proven and are proving to be a much better store of value. The fact that as far as consumerism is concerned bitcoin is easier to purchase goods with than gold.

The chart shows clearly that the testing of the utility of bitcoin has been going on for years and there have been a few crossover points up until now, however this angular trend and breakout is unique. Digital assets are becoming more acceptable as people become comfortable with the block chain technology and the implications that come with it. Retailers are accepting it as a form of payment and increasingly travelers are looking at it as a store of value. Internationally it converts well to 'local' currencies and back to bitcoin widespread adoption will really show it's utility.

In my opinion, April 2017 will mark the divergence of digital assets and physical assets. This gold breakout can be seen as not a bitcoin unique crossover, as the market cap of Bitcoin tops 21 billion, other digital assets such as Ethereum, Ripple, Dash, Monero and other digital assets have all seen market capitalisation growth like never before. 

Where to from here, in my opinion Bitcoin will break the $3000USD value by late 2017/ early 2018 and from there I believe that it's growth will be exponential, as the gateway currency to digital assets, bitcoin will see huge growth.

Till next time happy bitcoin-ing