The appeal of gold today is that it acts as a haven in bad times, and typically acts as a partial hedge against inflation. Bitcoin holders have discovered that not only is it not a hedge against inflation, it isn’t a haven either. Its price tends to move in line with risky assets, not safe ones. The gold price is up 4% in the past 12 months as inflation has soared, against a fall of 12% in the S&P 500 and a 43% loss for bitcoin. Digital, sure. Gold, not so much.
But in the long run, crypto’s best hope of survival is to come up with some useful function in the real world. That will require another round of innovation, and there’s no reason to think it will be the existing cryptocurrencies, let alone bitcoin, that will be the winners.
‘Enforcement 40’ for 2020
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