On the 50th anniversary of Bretton Woods, a Bloomberg strategist predicts that bitcoin will eventually overtake gold.
The remark was issued following Blockworks’ “Bretton Woods: The Realignment” conference, which brought together economists, macro experts, and investors to debate Bitcoin. Bitcoin (BTC) is displacing gold even as US policymakers strive to stymie its growth, Bloomberg Intelligence’s Mike McGlone stated on Monday. The top commodity market strategist attributed the Bitcoin market’s better growth to “digitalization of money and finance,” noting that the same causes helped the US currency acquire supremacy over gold “rapidly and organically.”
Since August 2011, spot gold has declined by more than 99 percent in relation to Bitcoin. McGlone’s remarks were among the takeaways from a recent three-day symposium at New Hampshire’s Bretton Woods hotel, which drew economists, macro analysts, and investors, including Jurrien Timmer of Fidelity Investments and Amy Oldenburg of Morgan Stanley, among others.
The recent “Bretton Woods: The Realignment” conference paid symbolic homage to the Bretton Woods system’s demise while focusing on rising financial assets such as Bitcoin that are threatening to supplant the “dollar hegemony” as the world’s next global reserve asset. By doing so, Bitcoin has directly attacked gold’s position as a traditional competitor to the dollar, which is already occurring, as McGlone explained.
Bitcoin is competing with gold as a viable alternative to the dollar.
The Federal Reserve’s lax monetary policy has resulted in supersonic price increases in the Bitcoin market, to the extent that the powerful upward moves have surpassed gold, a traditional hedging asset. Bitcoin increased from $3,858 to $64,899 as the US deficit grew. Anthony Pompliano, a partner at Pomp Investments and a long-time proponent of Bitcoin, wrote in a message to clients that holding wealth in dollars, bonds, or gold results in “negative real rates of return.”
“You essentially are left with bitcoin or equities, which leads you to consider an allocation to bitcoin given the high degree of volatility that will likely serve to outperform equities over a long enough time period.”
Pompliano’s words came despite the fact that developing digital assets may face regulatory problems, as McGlone noted in his Monday tweet. The cryptocurrency business has come under fire from Treasury Secretary Janet Yellen, Senator Elizabeth Warren, and Securities and Exchange Commission Chairman Gary Gensler.
However, McGlone emphasized that strict rules would be powerless to halt Bitcoin’s march toward parity with gold. Additionally, Liam Bussell, head of corporate relations at cryptocurrency trading platform Banxa, stated that US regulators are not interested in putting an end to Bitcoin but in protecting US investors from fraud.
“Illegal schemes resulted in approximately 82,135 occurrences of cryptocurrency fraud in 2020 alone,” Bussell added. The US agencies that could potentially regulate digital assets (CFTC, SEC, and FINRA) are open to instrument diversification as long as the instruments are fair and transparent.
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