Is Bitcoin Doing What Gold Did In the 1970s
3 min read

Is Bitcoin Doing What Gold Did In the 1970s? Comparisons Suggest Parabolic Price Rise Could be Just Around the Corner

By News Desk

One “what-if” scenario making the rounds in the cryptoverse is the possibility of Bitcoin following in the footsteps of gold in the 1970s. The idea stems from the growing perception that Bitcoin is in fact “digital gold,” serving the functions that the yellow metal once did but in a more efficient manner, such as with accountability, fungibility, and ease-of transfer.

Many players in high finance, such as Dawn Fitzpatrick, the CEO of Soros Fund Management, believe Bitcoin is sucking away capital from gold, perhaps explaining gold’s underwhelming returns over the last decade. Chamath Palihapitiya, billionaire venture capitalist and CEO of Social Capital, also recently stated that Bitcoin has already effectively replaced gold. In recent research from Deutsche Bank, senior economist and market strategist Marion Laboure said that she could envision Bitcoin becoming the 21st century version of gold.

“People have always sought assets that were not controlled by governments. Gold has had this role for centuries. And yes, I could potentially see Bitcoin to become the 21st century digital gold.”

If Bitcoin is in the process of replacing gold, one could posit that it would do so right now or in the coming months and years, under the narrative of excessive money printing and looming inflation, much like how gold went parabolic in the 70s in a similar climate.

Jurrien Timmer, director of global macro at Fidelity Investments, has been one analyst who has considered the Bitcoin-to-gold comparison. Based on it, he said BTC’s recent rally doesn’t yet seem overbought.

“In terms of price momentum, Bitcoin’s move doesn’t seem excessive. Below, the bitcoin/gold ratio along with its de-trended Bollinger Bands, measuring the number of standard deviations from its trend.”

In August, while admitting that the comparison may still be highly subjective, Timmer made a forecast based on the BTC vs. gold model that has so far been accurate.

“Based on my (highly subjective) gold analog from the 1970s, bitcoin looks ready to resume its up-trend.”

Timmer’s chart suggests that Bitcoin tops out somewhere in the vicinity of $200,000 this market cycle before stagnating for a few years. Following gold’s trajectory, it would then blast off into the seven figure range in the latter half of the 2020s.

Outside the institutional world, analysts like pseudonymous TechDev are also open to the idea of Bitcoin following gold. Switching up the timelines slightly, TechDev creates a variation of the comparison while also including Bitcoin’s 2017 bull cycle. All three price trajectories are so far interestingly similar, even if highly subjective.

“Decided to compare 2017 with our beloved 1970s gold.

Remarkably, they take #Bitcoin to roughly the same price.

Gold just gets there 1 month later.

Which is it gonna be?”

TechDev is calling for a market cycle top for Bitcoin somewhere between $150,000 and $250,000. Fidelity’s Timmer says while he’s not in the business of making bold predictions, his models converge for an average of $109,000 in 2023 or 2024, when most believe BTC will be in a bear market based on the 4-year cycle theory.

“So is bitcoin on its way to new highs? I know better than to make bold price projections but I will note that the next (and last) time my supply-and-demand models intersect is at around $100k in 2023 or 2024.”

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

Related Posts

Keep Network Explodes Higher
Keep Network Explodes Higher

Keep Network Suddenly Explodes Almost 180% As Crypto Markets Heat Up

October 15, 2021 2 min read
Bitcoin ETF Slated For Next Week
Bitcoin ETF Slated For Next Week

Bitcoin Inches From All-Time Highs With Futures ETF Slated For Trading Next Week

October 15, 2021 3 min read
Billionaires are backing Bitcoin over Gold
Billionaires are backing Bitcoin over Gold

Billionaire Owns Bitcoin and Ethereum, Says ‘Gold is Kinda Worthless’

October 14, 2021 3 min read
Bitcoin Never Below 40000 Ever Again
Bitcoin Never Below 40000 Ever Again

Bitcoin: Never Below $40,000 Ever Again? Crypto Analyst Benjamin Cowen Explains Why It’s Possible

October 14, 2021 3 min read
Coinbase to Launch New NFT Platform
Coinbase to Launch New NFT Platform

Coinbase to Launch New NFT Platform – Can The US’ Biggest Crypto Exchange Compete with Opensea?

October 13, 2021 3 min read
Way Too Much Money in Crypto To Stop It Now
Way Too Much Money in Crypto To Stop It Now

Way Too Much Money in Crypto To Stop It Now: Billionaire Investor Chamath Palihapitiya

October 12, 2021 3 min read
Bitcoin Eyes $72k as Golden Cross Looms on Chart
Bitcoin Eyes $72k as Golden Cross Looms on Chart

Bitcoin on the Verge of Massive Breakout as Critical Indicators Flash Green

October 12, 2021 3 min read
Bet on Bitcoin to 10 Million
Bet on Bitcoin to 10 Million

Bet On Bitcoin Going to $10 Million A Coin, Says MicroStrategy’s Michael Saylor – This is Why

October 11, 2021 3 min read
IRS Reward to Crack Monero
IRS Reward to Crack Monero

Can You Crack Monero? IRS Offers Six-Figure Reward To Anyone Able to Trace XMR

October 11, 2021 2 min read