Bitcoin Defies the Naysayers; Can it Someday Replace Gold?

Money Metals is the most crypto-enabled precious metals dealer in the U.S.

Mike Gleason Mike Gleason
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December 4th, 2020 Comments

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Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.

Gold and silver markets are recovering impressively in this first week of December.

After slumping last month to erase most of this summer’s big gains, gold shows a gain of 2.7% since last Friday’s close to trade at $1,842 per ounce.

Turning to silver, spot prices are up a healthy 6.0% on the week to come in at $24.15 an ounce. Silver managed to hold up relatively well during gold’s recent sell off. We saw no significant movement in the gold to silver ratio.

The major trend appears to be for silver to continue to narrow the gap. After the gold:silver ratio peaked at an historic high of close to 130:1 during the March panic lows, it has since narrowed considerably. Gold currently trades at about 76 times the silver price.

Silver bulls are eyeing a much further narrowing of the gold/silver gap in the months and years ahead. That’s what typically occurs during a major precious metals bull market.

Another metal that could well outperform is platinum. The sleeper metal appears to be finally waking up. On Tuesday, platinum prices surged back above the $1,000 level. As of this Friday morning, platinum checks in at $1,075 an ounce on the heels of a 9.9% or nearly $100 weekly advance.

And finally, palladium is this week’s laggard. Palladium prices are off $100 or 4.1% to trade at a still lofty $2,350 per ounce.

Well, another alternative asset class stole precious metals’ thunder this week, at least in the financial media. Everybody is talking about Bitcoin once again after the cryptocurrency vaulted to a new high above $19,000.

Bitcoin’s appeal is being bolstered by more mainstream institutional acceptance by Wall Street and the financial industry. Leading online payments processor PayPal recently moved to enable cryptocurrency transactions.

Bitcoin bugs are now issuing spectacular price forecasts of $100,000, $200,000, or even $500,000 per coin.

Skeptics counter that Bitcoin is being driven purely by speculation and has no fundamental basis for trading at current levels.

Some of these skeptics are firmly in the hard money camp and believe gold and silver will prove to be superior alternative currencies. At the same time, some Bitcoin promoters firmly believe that physical precious metals are obsolete and that cryptos are a superior store of value for the digital age.

It has been claimed that Bitcoin is “digital gold.” But investors should understand that Bitcoin absolutely does not replicate the properties of physical gold. Whatever its merits – and there are certainly some – it is no substitute for tangible wealth.

Cryptocurrencies and precious metals are entirely separate asset classes. One is novel and speculative, though potentially more useful in internet transactions. The other is timeless and universal. It doesn’t depend on an internet connection or involve any counterparty risk with exchanges or custodians.

An ounce of gold has been recognized as valuable by virtually all cultures for thousands of years. Gold can be counted on to retain value for as far into the future as your time horizon may stretch.

What will a Bitcoin be worth to future generations? There’s no telling. It could become something billions of people around the world access via their smartphones as the digital payments method of choice… or it could literally become worthless if replaced by a superior technology.

So far, Bitcoin has defied the naysayers. Despite exhibiting wild volatility at times, its price plunges have always been followed by even bigger price spikes. At least so far.

We certainly welcome the market’s verdict on cyptocurrencies and don’t view them as something to be shunned. In fact, Money Metals is an industry pioneer in accepting cryptos as payment for bullion purchases.

We are now proud to accept and send payments for metals in Bitcoin, Bitcoin Cash, Ethereum, Litecoin, EOS, Ripple, and Dash as well.

Clients may enter into precious metals transactions with us – either online or over the phone – and choose cryptocurrency as the method of payment.

Aside from our ability to accept payment in other cryptocurrencies besides Bitcoin, what further sets Money Metals Exchange apart from other merchants in our space is our ability to make payments TO clients using a variety of cryptocurrencies. We can purchase your metals and send you the digital coin of your choice as payment.

Money Metals is also a great platform for cryptocurrency holders who want to switch into precious metals as a safe haven. Our customers can swap Bitcoin (and other coins) for gold and silver to be stored by Money Metals Depository. Storing with us makes it quicker to swap back into cryptocurrency when the time comes, and avoid the cost and hassle associated with shipping metals.

Some speculators have recently taken to selling gold and buying Bitcoin. Chasing recent performance isn’t necessarily a wise long-term investing strategy, however.

Holding U.S. dollars is a losing long-term proposition – that’s guaranteed by the policies of politicians and central bankers. Both Bitcoin and precious metals provide potentially superior alternatives to Federal Reserve notes.

There is no doubt that cryptocurrencies can offer real utility and value. At the end of the day, though, a digital asset can provide no guarantee of standing the test of time like gold and silver have and will.

As I wrap up, I want to offer a quick reminder about the gift promotion underway at Money Metals.

As long as there’s at least one gift item in your order, the full order ships FREE no matter how small it is. Gift options are available under the Gift Ideas tab at – including gold bullion bracelets, silver stocking stuffers, clever book safes for hiding valuables, and other unique and affordable gift items. So please, check them out.

Well, that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. Until then this has been Mike Gleason with Money Metals Exchange, thanks for listening and have a great weekend everybody.

Mike Gleason

About the Author:

Mike Gleason is a Director with Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.