I've said it before, but it's a principle that all investors should know: all bull markets climb a wall of worry. It's an undeniable fact that there's an overarching sense of uncertainty in the air, and people are worried. Historically, when people have been worried about the stability of the financial system, they have looked towards precious metals to leverage against growing uncertainty.
But now, there's another aspect at play: the rising popularity of cryptocurrencies. Wall Street is now behind Bitcoin, and what this new embrace will lead to is a heavy shift in the narrative surrounding cryptocurrencies. It's already evident in the media discourse surrounding Bitcoin's recent moves, as the cryptocurrency that requires electricity and that represents data only is being dubbed Gold 2.0.
This analogy is shortsighted because it doesn't take into account the inherent differences between a precious metal like gold and a cryptocurrency like Bitcoin. One is a natural resource, and the other constantly requires energy to be maintained and produced. Think, one is independent wealth and one is dependent "wealth"; one can be safely stored and protected, and the other can be subject to security breaches that leave its holders with nothing.
Unfortunately, while the facts are clear, the mainstream narrative has become that Bitcoin is the best way to protect yourself in a crisis. With a push from Wall Street, there will undoubtedly be increased interest in Bitcoin and other cryptocurrencies, and in the midst of a currency collapse, it would not be surprising to see the Bitcoin price climb higher. The majority of people do what they are taught to believe. The problem is, they are at risk of losing sight of the bigger picture.
Keep Your Eye on the Ball
My main piece of advice for any investor is to keep their eye on the ball. Recognize that the destruction of fiat currency is happening at an accelerated rate, globally, and that precious metals have proven themselves, time and time again, to be the best hedge against a collapsing financial system.
Gold is known to be the standard for preserving wealth; it always has, and it will probably pull through again this time. Silver, on the other hand, has been demonetized for over a century, but it still perseveres; it still emerges as a monetary metal in times of crisis.
Even if investors have purchased the metals at their all-time highs, having patience and conviction will pay off in the long-term. Stop thinking about where it could've started, and keep your eye on the ball: focus on where you're sure it is heading.
I recently spoke with Elijah K. Johnson of the Miles Franklin Market Update to dive into the long-term picture for precious metals and Wall Street's new embrace of cryptocurrencies. And a final word, Bitcoin and Gold can coexist with my original article- My two bits about Bitcoin outlines my thinking. You can watch the full interview here.
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