image by Dmitry Demidko
If you've been watching the markets, you might be wondering why Bitcoin isn't currently matching or exceeding Gold's performance. It's a valid question, especially for those who believe in Bitcoin’s long-term potential. The answer, however, is surprisingly straightforward.
Right now, we’re seeing Central Banks aggressively increasing their gold reserves. They're stacking gold as a form of insurance against the increasing volatility in the global economy. This isn't a new trend; gold has served as a foundational monetary asset for roughly 5,000 years, it's a proven safe haven.
But here’s the key point: it’s simply too early for Bitcoin to receive the same level of institutional investment.
Think about who’s making the decisions at these massive sovereign and financial institutions. The vast majority of these decision-makers are 60 years of age and older. They grew up in a world before Bitcoin, and frankly, many don’t understand it. They're comfortable with what they know, and gold fits neatly into that framework.
This isn't a criticism, it's just a reality. And importantly, it's opportunity.
The fact that Bitcoin hasn’t yet received the "sovereign or institutional bid" isn't a sign of weakness, but a sign of being ahead of its time. Bitcoin is still a relatively young technology – only 17 years old.
We remain incredibly optimistic. Bitcoin is the superior asset! It's mathematically sound, decentralized, and offers advantages gold simply can't match. But widespread adoption, especially at these levels, takes time.
We need to allow time for a new generation of decision-makers to rise, for understanding to grow, and for the benefits of Bitcoin to become undeniable. Let time do its thing. The future, I believe, still points towards Bitcoin becoming the global reserve asset.
It’s not a question of if, but when!
TLDR:
Bitcoin is under performing Gold right now because Central Banks are buying Gold as a safe haven in uncertain times. They're sticking with what they know – and most decision-makers at these institutions don't understand Bitcoin yet. This isn’t a bad sign for Bitcoin’s future, but means we need patience as understanding and adoption grow over time.
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