The Canary In The Coal Mine

Earlier this month Bitcoin breached yet another all-time high (ATH) of just over $125,000, and is currently still trading above $100,000 despite last week’s “biggest ever dip.”

It turns out that when you measure something with a fixed supply using something with an infinitely expanding supply, the number will always trend up.

But despite recently reaching new ATHs, we aren’t seeing the same fanfare and media circus we’ve experienced during previous peaks. In comparison to the 2013, 2017, and 2021 bull markets, everything feels rather muted and subdued. Especially after last week’s sell-off.

One of the reasons for this could be that so far this year, Bitcoin hasn’t really been the star of the show. At least not for investors.

Instead, after years of waiting, it’s finally Peter Schiff’s turn to run a victory lap. Gold is currently on a tear and outperforming everything! Since the start of the year, Gold has increased by over 63%!

In comparison, BTC/USD is up only ~13%.

It’s nice to see Peter able to celebrate for once, but it’s yet to be seen if he will actually get to finish said victory lap. Because while Gold has outperformed Bitcoin for the past 10 months, when you zoom out even a little bit, Bitcoin’s performance has absolutely dwarfed Gold.

Over the past 5 years, Gold has only increased by a paltry 125%, meanwhile, in the same timeframe, Bitcoin is up a mighty 834%+!

Gold might be performing well this year, but it has a hell of a lot of catching up to do!

Nevertheless, Gold’s impressive recent performance could be a sign of things to come. The US Dollar was originally backed by gold, but this year it slid more than 50% in value against it!

While Gold rising in value against the dollar isn’t particularly surprising, what is interesting is the rate of acceleration. Since January 1st this year, Gold’s market cap has rapidly increased from $18 trillion to an eye-watering $30 trillion!

That’s an increase of over $10 trillion, more than four times larger than Bitcoin’s entire market cap! All in just 10 months!

Like a canary in the coal mine, Gold might be signaling that the rest of the world is ready to start calling bluff on fiat currencies. It certainly suggests that investors are tired of constant debasement and are looking for a flight to safety.

So is Gold signaling a global shift in sentiment toward the government-issued coupons we are expected to call money? Are people finally starting to lose faith in the once mighty US Dollar? And what does it mean for Bitcoin?

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The Golden Canary

The global flight toward Gold shouldn’t come as much of a surprise. Economic behavior is almost always driven by incentives. What we’re seeing play out is simply people following them.

In a world where fiat money represents holding a melting ice cube, holding gold instead makes a lot more sense.

So far this year, Gold has also significantly outperformed the S&P 500. Despite being in one of its strongest bull runs in decades, the S&P 500 is only up ~2% compared to Gold’s ~45%.

Nobody wants to hold dollars, and it would appear there is a growing trend toward wanting to exchange them for Gold instead of stocks.

This suggests that people aren’t necessarily buying gold as an act of speculation. If that were their sole motivation, you would expect to see equities attract a similar, if not higher, level of investor interest.

Instead, investors are starting to play defensive, and the global move toward Gold suggests that people’s primary motivation isn’t growing wealth, it’s protecting it. People don’t want to risk investing in a stock market propped up by printed monopoly money, and they don’t want to run the gauntlet of picking winners when AI is on the brink of disrupting entire industries.

To a lot of investors, Gold looks like a safe haven free from the risk of disruption and (relatively) free from government and central bank interference. They’re not speculating; they’re seeking safety and security.

Like a canary in the coal mine, Gold is signaling that people are expecting chaos. They expect fiat currencies to continue hemorrhaging value but don’t want to gamble in the markets.

In short, the flight to gold suggests people are desperately running for the exits.

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Eventually, The Canary Dies

If Gold’s performance is signaling that people are becoming more aware of the central banking scam, that’s definitely a good thing. But as a Bitcoiner, it can be perplexing and frustrating to watch people choose Gold instead of Bitcoin to hedge against it.

Unlike Gold, with Bitcoin you can easily store millions of dollars of wealth without having to find a way to secure 16+ kilos of metal. Bitcoin offers a sovereignty and portability that Gold simply cannot match. You can traverse the globe with Bitcoin without worrying about border security and transact with anyone globally without permission. It allows you to hold your wealth securely, free from debasement and far outside the purview of greedy governments.

To put it bluntly, Gold simply can’t compete.

When you understand Bitcoin properly, the choice becomes obvious. But therein lies the problem—most people don’t. Only 4% of the global population owns any Bitcoin, only 0.4% hold it in secure self-custody, and just 0.0011% own Bitcoin in self-custody and transact via their own full node.

Bitcoin can only offer you security and certainty if you take the time to understand it. That means for the time being, people in a panic about where to protect their wealth in the short term are following the path of least resistance and opting for something they are familiar with.

This is the one major advantage that Gold does have over Bitcoin. It has a proven track record as a store of value that spans thousands of years, and psychologically, this gives people a great sense of security.

Unfortunately, staying in their comfort zone might be the very thing that keeps those same people from achieving the financial freedom they crave.

Year to date, Gold may have outperformed Bitcoin, but over the past decade, Bitcoin is the clear winner. Its objective superiority as both a store of value and medium of exchange has seen it become the 8th most valuable asset in the world in just 16 years. It’s catching up to gold VERY quickly!

The question worth asking is, does gold outperforming Bitcoin for the past 10 months really suggest this trend won’t continue? I mean, just look at the chart below!

If the trend does continue, then it poses a very real threat to those who choose to park their wealth in Gold. If Bitcoin continues to become recognized as a better store of value, then gold will eventually no longer command a monetary premium. Bitcoin will relegate it back to its utility value for use in things like electronics and jewelry only.

Given that Bitcoin is so frictionless and accessible, there’s a reasonable chance that this transition happens a lot faster than most people expect.

The canary in the fiat mine might be your signal it’s time to head for the exit. But put all of your faith in Gold, and you might find you get trapped in the cage with it.

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Escape the Fiat Mines – The Bitcoin Way

If, like us, you can hear that canary tweeting away, then you know it’s time to hotfoot it for the exit. The fiat mines look a lot like they are about to collapse, and Bitcoin is your best bet for survival.

Watching $10 trillion flow into gold in under 10 months isn’t a signal that it’s the better investment. It’s a reminder of just how much capital will ultimately flow into Bitcoin, and just how quickly that can happen.

It’s time to get yourself prepared NOW. Your best bet for protecting your wealth is holding Bitcoin in full self-custody with zero counterparty risk. Gold is letting us know loud and clear that there’s a bumpy road ahead. Holding Bitcoin with zero counterparty risk is like putting your seatbelt on.

If you want to learn the skills you need to protect yourself properly then our experts can get you there in just a matter of weeks. In no time at all we can make sure that you’re competent, confident and ready for anything.

The fastest way out of the fiat mines is to book a free 30-minute call today. When you’re ready to be the most capable Bitcoiner in the room, get in touch.