Would You Trade Bitcoin for Gold?

The bottle-rocket trajectory of bitcoin’s rally has required me to put out increasingly ambitious Hidden Pivot targets several times each day. Currently I am using 18436 to project a top of some sort, although I hesitate to suggest it will be the top. Actually, I’d be happy merely to see BTC pull back from that number for more than a few hours — as long as it has taken for this vehicle to obliterate Hidden Pivot resistances that we might have expected to contain the jubilation for a few days if not longer.

This evening, BTC has plummeted nearly $2000 since peaking several hours ago at 17171, a new record. Most of those who have benefited from the cryptocurrency’s breathtaking climb are not traders, just hoarders who may be starting to wonder whether it’s time to get off.  But how? The best way for them to take profits would be to convert bitcoin to cash or to buy something ‘real’ with bitcoin. Something like physical gold — about as real as investables get. At one point on Thursday afternoon, a single bitcoin could have purchased ten St. Gaudens $20 double eagles — and then two more later in the day when bitcoin peaked at 17171.  Would you do that deal? Of course you would.

Coin Dealers Not Leaping to Do the Trade

So why isn’t everyone swapping bitcoin for gold? Well, even if they wanted to, they’d have a tough time finding coin dealers eager to take the other side of the trade. If it were otherwise, the price of gold futures would be rising, not falling as it has for the last month.  Bitcoin hoarders can be forgiven for thinking they’ll make much more money by staying in bitcoin than if they convert their digital lucre to bullion. Realize that the price of gold has been languishing for more than four years near $1250 since peaking in 2011 just above $1900. Even so, can there be any doubt that at some point in the future, bitcoin speculators will regret not having swapped their digital money for gold or some other tangible asset? Even with bitcoin’s value rising a thousand dollars or more per day, this seems like a no-brainer to me.