Bitcoin is back in the news after briefly pushing above $18,000 this morning. However, the current gains are unlikely to hold. The reason for this is that the gains have not translated into much enthusiasm among people outside the Bitcoin community. Google trends has not picked up on any increased interest of note. The price is therefore driven up largely by people already owning Bitcoin.
The current push higher in the price of Bitcoin is most likely due to windfall money in the form of stimulus checks and the like. The lock down has also spurred speculation. But, as Google trends indicate, this has all been happening within a relatively small group of people. Once their windfall is fully invested, there will be no-one else ready to put more money into Bitcoin. Those forced to sell at that point will discover that the buyers are no longer there.
While it's possible that Bitcoin will surpass its peak of 2017, it's unlikely to go much higher unless there's a sudden and renewed interest in Bitcoin from newcomers. However, with gold having added 50% to its price since late 2017, Bitcoin must reach $30,000 to come out equal to gold's performance since then.
It's also worth noting that those currently selling Bitcoin are unlikely to stay with the dollars they receive. They are going to put their dollars into something else, and gold and silver are likely to be high on their list of things to buy due to the monetary nature of these metals. This will push the price of gold and silver higher. Higher Bitcoin prices will therefore at some point translate into higher gold and silver prices, and this push higher for the metals will continue irrespective of which direction the price of Bitcoin goes. This is due to the sellers' hard money preference. Once out of Bitcoin they will turn to gold and silver for further wealth preservation regardless of which direction Bitcoin is headed.
From this it's clear that Bitcoin remains a speculative bet while gold and silver remain sound money for wealth preservation.
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