ETF or Gold? The Most Important Battle For Bitcoin

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ETF or Gold? The Most Important Battle For Bitcoin

By Trassos Vidalous
August 15th, 2018

According to a study on Bitcoin narratives, It lives two narrative battles. The first one is digital gold or payment solution and, the second, whether it is financial asset or a marginal cryptocurrency, for the underworld.

Is Bitcoin Digital Gold Or Payment Solution?

For most of those who perceive value in cryptocurrencies, the issue is not at all strange. Much has been said last year about bitcoin's similarities with gold, its scarcity and intrinsic value of technology.In addition, it has been speculated even on their "superiority" to gold, as facilitated exchange capacity, less costly security and privacy of the guard.

However, the point of greater friction in this narrative is that bitcoin and its governance should remain relatively decentralized and resistant to both state censorship and major financial institutions in order to be a safe haven in the event of a breach of the global trust system.

Importantly, the gold market cap is now 7 trillion dollars while crypto market cap is 200 billion, and BTC half of that.

Some big shots as Robert Kiyosaki, author of Rich Dad Poor Dad, Bill Gates, Steve Wozniak and even Nomi Prins, a former manager at Goldman Sachs, predicts that major international monetary crisis is inevitable and near. So, there is some connection here not just the classic apocalyptic economic prophecies.

In relation to Bitcoin as payment solution it must be scalable and able to do microtransactions. In this regard, it must be made accessible to lower transaction costs and time expenses.Lightning Network, the hope of scalability, however, will need hubs to negotiate minimally efficiently, and some argue that fractional tokens systems may be used in such hubs, turning the ecosystem into just another instrument for banks.

This position benefits from institutional money, enhances the idea of ​​Bitcoin as a financial asset and favors the desired approvals by the Commodity Futures Trading Commission - CFTC American.

Is Bitcoin Just An Over-The-Counter Market Or Financial Asset?

Lawyers of OTC prefer that cryptocurrencies continue unregulated, out of exchanges or at least with decentralized negotiations.It is said that the volume of this type of trade can be two to three times higher than those recorded by the exchanges, as pointed out by the TABB Group, an international research company.

In this context, the negotiations over the counter are preferred by high liquidity, greater freedom to hire and little traceability of transactions.However, for the defenders of the financial asset Bitcoin ecosystem should be regulated and accept the onboarding processes for clients such as KYC.

Financial Asset, An Exchange Traded Fund.

Although these are important discussions, which has prevailed as the value of Bitcoin is financial speculation, so the Keynesian animal spirits tends to drag the governance of BTC toward higher cash flows, as with all other assets.

Some may even say that this is already happening, while the volume of decentralized exchanges still lacking volume.

A controversial financial asset and "probably" backed by U.S. dollar may have led prices to historic highs we saw at the end of 2017. The Tether flow - the new money - and their impact on the market has been much studied, but every Austrian economics can give a class on how the new money enters the economy ravaging prices.

The same can be observed in regular economy where central banks postpone natural crisis and expansion cycles through the fractional system and its central bank, increasing the supply of new currency in geometric progressions which devastates the purchasing power of satellite economies and exports inflation from economic centers.

This indicates that unless something changes drastically in the human soul and on the world stage, new digital presses will determine the path taken by Bitcoin and most cryptocurrencies until all public confidence is spend, since these printers will never be paperless.

Think about it: while the total capitalization of the gold market is around 7 trillion, the non-physical money from central banks around the world and traded debts pass the 300 trillion home.