Bitcoin (BTC) beats gold as a reserve asset, says strategist

Cryptocurrencies such as Bitcoin have finally made their way into mainstream finance with various banks now offering crypto-related services. A strategist even believes that BTC is even better than gold in every way claiming that it is “the best reserve asset and best collateral asset ever seen.”

In his monthly global macro report, former hedge fund manager and Global Macro Investor CEO and strategist Raoul Pal recently shared his analysis on Bitcoin, the world’s largest cryptocurrency by market cap. For Pal, BTC is better than gold in every single measure.

“I think it’s the world’s best trade and of which I’m irresponsibly long,” the Global Macro Investor CEO wrote about Bitcoin. “The honest truth is that it beats gold on every single measure except it just doesn’t have 10,000 years of history.”

Pal also pointed out Bitcoin’s advantages over gold such as its portability and the limitation to its supply. “Something that has a finite fixed supply and is incredibly secure has true value,” the CEO explained. “The fact that it is divisible, portable, transferable and exchangeable makes it have potentially more value than any other store of wealth, or any other form of money.”

Unlike cryptocurrency, Pal highlighted the difficulty of determining the ownership of gold. “Gold also is not easy to use because it has to sit in vaults and its ownership needs to be proven and transferable and in the world of re-hypothecation, even central banks have re-lent the gold out so no one knows the owner unless you own it and store it yourself,” he said.

Pal also believes that Bitcoin is a better collateral and reserve asset compared to gold. “In my opinion, bitcoin is the best reserve asset and best collateral asset ever seen,” he wrote. “It is the hardest asset ever produced, with an impossible-to-change formula for supply that gives it predictability like no other asset ever.”

Indeed, businesses are now starting to view popular cryptocurrencies such as a dependable store of value. For example, Canada-based Tahini, a restaurant chain that specialized in Middle Eastern cuisine, has converted all of its reserve cash into Bitcoin.

The main reason for the company’s decision is the fear that the Canadian dollar will soon devalue as the government prints more money to pay for the loans it took when it provided assistance to businesses hit by the coronavirus pandemic. “And that’s when we as a company decided to store all of our excess cash reserves into #bitcoin as it offers a much better alternative to saving cash,” Tahini owner Oman Haman said. “We will continue to do that over the coming years and maybe forever if we don't have a need for the fiat.”

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