No one has done this before, to my knowledge, so I’ll lay it out there for the world to see, in black and white. Bitcoin is the world’s top economic “safe haven” of the 21st Century, and I’ll provide you with four examples. These examples are from some recent economic crisis that had mainstream investors running for the “Eject Button” on their investment fighter jets, and they have sought to land in Bitcoin over the most recommended precious metals, Silver and Gold.
Obviously, we can only cite examples from after the “Genesis Block” of Bitcoin on January 3rd, 2009. Feel free to check my math in the links provided, as I will not be using many images. Let us begin with the infamous and inaugural banking “bail-in” in Cyprus, from back in April 2013. This was essentially what put Bitcoin on the mainstream map as an investment option during economic turmoil.
Keeping the history lessons brief, the “bail-in” of Cyprus reached critical mass in March-April of 2013, where the central and commercial banks conspired to “recapitalize” the banks from the accounts of depositors. This led to a run on little-known Bitcoin, which was trading for less than $35 USD before this unique event occurred in the Meditteranean Sea.
For any Bitcoin prices during these indicated price periods, please go to BitcoinAverage.com and select “All” from the time field. Bitcoin started March of 2013 trading at around $33 USD, peaked on April 9th of the crisis at over $213 USD and finished April at just under $139 USD. I’d say an over 500% increase in price during this period is indicative of skyrocketing demand and is probably not a coincidence.
Historical Gold and Silver prices are provided by PMBull.com or silver-and-goldprices.goldprice.org. Gold started the March 2013 at $1572.30 USD and Silver was trading at 28.45. End of March, Gold was trading at 1594.80 USD and Silver at $28.29 USD. So Gold was up less than 0.1% and Silver was down. This would not indicate much interest in March when Bitcoin went from about $33 USD to over $92 USD.
On the day Bitcoin peaked during the crisis, Gold traded for $1586.20 USD and Silver at $27.87, so both Gold and Silver dropped during the peak of the crisis. I believe that proves Bitcoin was a qualified safe haven ahead of Gold and Silver during this economic event. Let’s move to “Grexit” in the summer of 2015.
July 2015 typified the Grexit economic crisis and was a big month for Bitcoin trading and price movement, though not as dramatic as Cyprus was in USD values. However, let’s start with Gold prices for the month. Gold started by closing July 1st at $1168.65 USD. It’s highest value for the month was July 6th when it sold for $1173.60, and it finished the month down at $1094.53.
Silver started July 1st closing the day at $15.57, peaking at $15.74, the same day that Gold peaked and closed the month down at $14.81.
Bitcoin started the month of July at $260.75 USD, reached a high of $305 on the 12th and finished the 30th at $289.70. So Gold rose less than $5 USD in July, Silver less than a quarter, but Bitcoin rose over 10% for the month, with a peak gain of over 17%. Point #2 made.
Let’s move to June of this year. The Brexit, where the British Pound dropped to 30-year lows. The Brexit Referendum date was June 23rd, 2016. On June 1st, Bitcoin was trading at $535.17. On the 19th, four days before the vote, Bitcoin reached its high for the year at $758.31, a gain of almost 42%, and it finished the month at $656.19, up almost 23%.
Gold had gained this month too. It started June at $1213.35 USD, peaked for the month after the vote, on the 27th, indicative of value provided by the event, at $1325.55, a gain of 9.2% at its peak. It ended the month at $1322.18, a total gain of less than 9%.
Silver started June 1st closing at $15.96 and rose steadily through the month, and into July as well. It closed June 30th at its best price of $18.71, a gain of 17.2%. This was almost twice as much of a gain as Gold, but still well behind Bitcoin for the month and less than half of its peak performance. Third time in a row that Bitcoin beats the precious metals market.
Finally, let’s check out the election of Donald John Trump as America’s 45th President. We’ll just focus on the 7th of November to the 11th to see how the market reacted form that Monday, the day before the election, through Friday.
Looking at Gold first is pretty easy. Gold dropped in value all week, from $1280.94 to $1225.85 at Friday’s close. Silver did better than that, but not much better. Silver started the week at $18.22 USD, peaked on Thursday at $18.64 and dropped big of Friday to $17.34. Not much market demand I’d say, given the most powerful man in the world is going to be a reality show star, which might scare market observers just a taste.
What did Bitcoin do that week? Started the week at $708.85, rose to $724.14 on Thursday the 10th, and finished the week just above $720 USD. Not huge gains, in the 2% range, but easily ahead of Gold and Silver. Again.
You can dismiss the final trial as statistically insignificant. Bitcoin may have just risen through its natural appreciation curve during that time, and the election may have had no effect at all on Bitcoin. This is possible. I'll take a two-point win over a loss any day.
The point isn’t to cast shade against precious metals, or to say they have proven to be poor investments. They are excellent holds, in the long term. And to say these markets aren’t controlled and manipulated by major banking interests would be pure ignorance. Bankers have manipulated these markets for years, been caught more than once, and were hardly punished, which incetivizes them to keep on keeping on.
Gold and silver may really be worth many times more than what they trade for but what can you do about it? The only ones punished were the investors left holding the bag of coins worth much less than they should, namely the minor investors amongst us.
Unfortunately, a good reason to avoid the precious metals markets may be that you may never really get true value for your money, due to corruption, unlike Bitcoin’s market, which appears to be as free as financial markets get. Sound money at a true market value? What a concept!
The point is when the chips are down, people are not moving into Gold or Silver. They have proven, time and time again, to head into Bitcoin, and probably make a nice profit on the back-end, with Bitcoin holding its value after the storm has passed.
These are not opinions. These are Bitcoin value facts. Enjoy the truth of the matter, and have a great weekend!