Bitcoin and Gold in 2022

A new age of inflation

The events which we are witnessing right now have not begun with the start of the war in Ukraine or even the COVID-19 pandemic. We have had decades of low inflation, which shaped the minds of millions of people around the world. This will now finally have come to an end, since people will have to face the new reality, we live in. The great moderation is over! And with that, we finally have to realize, that the mess we are in right now was created by fiat currencies. They are prone to inflation and are linked to governments. The current developments should make it clear to everyone, that decentralized and non-inflatable currencies should be the way of the future.

Looking for a contender

Stepping back a few years, we tried to find something that could replace fiat currencies or be a strong contender in doing so. We therefore found bitcoin quite early. It has to be said, that we are not bitcoin maximalist, but we understand how it works and want to implement it as good as possible. First, we invested in it in private, but now we also invest in it professionally in our investment funds. We are also strong proponents of combining bitcoin with gold, since they complement each other. One also has to differentiate between bitcoin and many of the other so-called “cryptocurrencies” who don’t even attempt to be a store of value and often have no use case at all.

Slow and steady

Bitcoin has seen many ups and downs over the past years, and we are sure that we will still see many in the future. The asset is still very young and this has consequences. This also scares big investors who cannot or don’t want to handle the volatility. First it will be small investment firms and then gradually bigger ones, who will pick up bitcoin as a new option. Once it is established, its volatility will also respond accordingly. This should also not happen too fast, since this always risks having large drawbacks and won’t help make the asset more credible with institutional investors and companies.

Why bitcoin at all?

Foremost, as we stated, bitcoin could be the basis for a new monetary system. This makes it already pretty interesting. Another is the point many people make that bitcoin has no intrinsic value. Here we have to remind everybody that at the end of the day value is subjective. Value is determined by what you can do with something. This is why gold has value. It has interesting chemical properties which make it useful for us. And with bitcoin there are already uses. But there are still many more possible uses, which we haven’t even discovered yet. There is also the network itself. People connecting and exchanging ideas all over the world. One big point of crypto is to find out how valuable networks can be.

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