diff --git a/claims/is-digital-gold.md b/claims/is-digital-gold.md index 540e1c7..2584948 100644 --- a/claims/is-digital-gold.md +++ b/claims/is-digital-gold.md @@ -1,4 +1,6 @@ -# Bitcoin is not the basis for a new gold standard +# Is bitcoin the basis for a new gold standard? +Bitcoin is not the basis for a new gold standard + The neo-metallist claim is that bitcoin can operate as a new asset class which exhibits similar financial properties to [gold](../concepts/gold.md). The strong version of this claim asserts that a new [gold standard](../concepts/gold-standard.md) can be built on top of bitcoin and that this can form the basis for a market economy. These claims do not stand up to scrutiny as bitcoin has no consistent track record of being a reliable store of value, it's price movements are extremely volatile and thus is not a reliable place to store value on long time scales. Bitcoin's price behavior is uncorrelated with gold and is largely correlated with the broader stock market making it an unreliable safe haven in times of market volatility since it is directly exposed to the price action of the Nasdaq. @@ -14,4 +16,4 @@ Even if bitcoin could function as a new gold standard. The [gold-standard](../co 1. Doctorow, C. (2022, February 3). Pluralistic: 03 Feb 2022 – Pluralistic: Daily links from Cory Doctorow. https://pluralistic.net/2022/02/03/liquidation-preference/ 1. Selmi, R., Bouoiyour, J., & Wohar, M. E. (2022). “Digital Gold” and geopolitics. Research in International Business and Finance, 59, 101512. https://doi.org/10.1016/j.ribaf.2021.101512 1. Cembalest, M. (2022). The Maltese Falcoin: On Cryptocurrencies and Blockchains (p. 31). -1. Wang, G., Tang, Y., Xie, C., & Chen, S. (2019). Is bitcoin a safe haven or a hedging asset? Evidence from China. Journal of Management Science and Engineering, 4(3), 173–188. https://doi.org/10.1016/j.jmse.2019.09.001 \ No newline at end of file +1. Wang, G., Tang, Y., Xie, C., & Chen, S. (2019). Is bitcoin a safe haven or a hedging asset? Evidence from China. Journal of Management Science and Engineering, 4(3), 173–188. https://doi.org/10.1016/j.jmse.2019.09.001