Sun. Aug 14th, 2022

Gold/Silver Ratio

When even CNN reports that Bitcoin (BTC) is the investment of the last decade, you know something is going on. CNN Business’s article from December 18th, 2019, reported that $1 turned into $90,000. I don’t know where CNN got that math because they don’t reference a date or price for the beginning or the end. What we do know is that the first official traded price for Bitcoin, at it’s lowest, was in July 2010 at $0.0008 – which means $1 of Bitcoin at $0.0008 would be worth a staggering $875,000,000 (BTC at $7000) today. Maybe a little more realistic would be the average close on July 17th, 2019 of $0.05, which means that $1 would be worth $140,000 (BTC at $7,000). $140,000 isn’t close to $875 million, but it’s more realistic. But how does Bitcoin’s performance rate against other markets? Let’s look.

S&P 500 10-Year Performance: +190.58%

NASDAQ 10-Year Performance: +366.81%

DOW 10-Year Performance: +175.50%

Oil (CL Futures): -23.25%

Gold: +39.04%

Silver: -2.78%

DXY (US Dollar Index): +24.38%

Bitcoin: +8,309,851.93%

There are a few 10-Year performance levels that I find very interesting. First, is the massively funny performance of Bitcoin. Second, the percentage difference between the NASDAQ and both the DOW and S&P 500. Oil falling nearly -25% is interesting, but not surprising – the influx of US oil into international markets has certainly curtailed any strength that OPEC used to have. Regarding the outperformance of Gold and Silver, we should look at the Gold and Silver ratio chart. Currently, it takes roughly 85 ounces of silver to equal one ounce of gold. Historically the ratio is between 40 to 50, so we can expect silver to rebound significantly.

Gold/Silver Ratio

 

Gold Bull remains a Bitcoin Bear

Regarding Bitcoin’s performance, even prior doubters have turned into bulls. Bloomberg reported back in August 2019 that an analyst at Goldman Sachs is ‘unofficially’ bullish on Bitcoin. One of the loudest and strongest opponents to Bitcoin is a well-known and respected Gold investor, Peter Schiff. On a personal level, I am a big fan of Mr. Schiff, and I agree with nearly every approach he has to modern markets – except when it comes to Bitcoin. Mr. Schiff has been railing against Bitcoin for quite some time.

Bitcoin (BTC)

An example of this would be an article from CNBC in 2014 where Schiff called Bitcoin a modern-day tulip mania as far back as November 2013 (about the Dutch Tulip Bubble). Bitcoin was trading at $503 during those comments. Fast forward nearly four years to 2017 and Schiff continued to warn people about Bitcoin despite Bitcoin moving from $503 to $4200 – a +846.89% gain. However, since the all-time high and the bear market that ensued, Schiff’s bearish stance has been in line with the price action and trend and his forecasts continue to point to lower and lower prices – the latest indicating a move below $1,000 is now a likely scenario. If prices do drop down to this level, then I believe there is a case to be positive for both bulls and bears. Bears will make a nice profit on a fall, but any long term bulls will be salivating for such a massive discount. As a Bitcoin bull, I would not be upset with such an enormous discount!