Bitcoin vs gold: the race is not even fair
Also Grayscale becoming irrelevant and a perpetually inverted yield curve
Welcome to the Friday edition of the Ecoinometrics newsletter.
Every week we bring you the three most important charts on the topics of macroeconomics, Bitcoin and digital assets.
Today we'll cover:
Bitcoin vs gold: the race is not even fair.
Is Grayscale becoming irrelevant?
A perpetually inverted yield curve.
Each topic comes with a small explanation and one big chart. So let’s dive in.
In case you missed it, here are the other topics we covered this week:
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Bitcoin vs gold: the race is not even fair
Gold just made a new all-time high to $2300 per ounce. The uptrend is particularly strong since March. If you follow Peter Schiff on X (not investment advice) you have certainly noticed.
Why is it up? Central banks (China, Turkey, Poland, India, …) have been buying in the past couple of years and they are still buying now. That’s part dedolarization and part debasement hedging I guess. And apparently the retail demand coming out of Asia is quite strong.
That’s not preventing the gold ETFs holdings to continue trending down…
But with gold making a new all-time you are seeing again people wondering if they should buy gold or Bitcoin as their store of value.
Now depending on what you want out of your store of value it could go either way.
If you want something that’s going to survive if 100% of digital records are erased from planet earth then go with gold. If you want something that’s heavy, something that you can touch and that can be used as book ends, to exercise or to break in a Cybertruck then go with gold.
If you want an asset that is internet native and convenient go with Bitcoin. If you want some asset that will not only act as a store of value but that also has at least a 10x growth left in it then go with Bitcoin.
The choice is pretty clear.
Is Grayscale becoming irrelevant?
I guess Grayscale isn’t so happy about how this Bitcoin ETFs story is going.
In less than three months GBTC went from holding 620k BTC as a Trust to holding 320k BTC as an ETF. That’s not the halving you are looking for. And of course that’s a lot of selling pressure on the Bitcoin market.
Now 320k BTC is still a lot. So I guess we can’t say they are irrelevant… yet.
But at the same time the BlackRock Bitcoin ETF is catching up really fast. Already BlackRock & Fidelity put together have accumulated more Bitcoins than GBTC.
If this continues for six months IBIT and FBTC will be the incontested winners of in this power law distribution. GBTC will be relegated to large but not super relevant funds.
At this point it is hard to see it go any other way.
A perpetually inverted yield curve
The recession. It is still not there. The yield curve is still inverted. What’s going on?
Typically a recession happens 1.5 years after the yield curve gets inverted for the first time. We are already past this point and there is no recession in sight. And given that US consumers are still spending like there is no tomorrow there are good reasons to think that the economy can continue doing ok.
Plus there are good reasons why the yield curve is staying inverted. Everyone expects the Federal Reserve to cut rates soon (TM). And they are probably right if by soon they mean this year.
I know a lot of people are waiting for the yield curve to un-invert as a signal that a recession is about to start but this doesn’t look like something imminent.
Lets keep an eye on it.
That’s it for today. I hope you enjoyed this. We’ll be back next week with more charts.
Cheers,
Nick
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Today's post made me lol more than once.
Hey, just a heads up, the link at the bottom of the page for the survey goes back to your home page.