🔥Can crypto overtake gold?🔥
👉Mike Mangan discovered gold around the turn of the century.
Rattled by the dotcom bust and concerned by America’s plunge into money printing to boost its economy, the Sydney based former investment banker, stock analyst and funds manager turned to investing in the oldest form of wealth or, more specifically, those who mine it.
Gold, he explains, is a hard asset, a relatively unique metal because of its resistance to corrosion, it’s malleable nature, visual attractiveness and its scarcity, all of which contributed to its use in coinage and jewellery, dating back thousands of years.
“It has a history, and history and reputation are so important when it comes to finance,” he says.
That goes a long way to explaining why gold-trading dwarfs the Bitcoin market.
But Mangan empathises with Bitcoin devotees, many of whom were left disillusioned by the near collapse of capitalism during the Global Financial Crisis, and their search for an alternative.
“I wouldn’t underestimate the cognitive dissonance of people wanting to find an alternative in a system they believe is going to hell,″ he explains.
The rise of Bitcoin, he says, “reflects a loss of confidence in the monetary system”.
While global currencies no longer trade on a gold standard, most countries, and particularly China in recent years, continue to amass gold as a store of wealth.
America hasn’t added to its gold reserves at Fort Knox for years but it holds the biggest reserves of any country by a long shot.
Like Bitcoin, gold too has punched through to record levels in recent months. Unlike Bitcoin, it’s rise has been steady during the past 20 years, providing a perfect hedge to the degrading of the US dollar and to inflation, as this graph in US dollars shows.
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