13 Mar 2014 / Sydney Morning Herald – A great investing mistake is to try to predict the future. Really, an investment decision is more about the price you pay and whether you can afford to be wrong.
I’ve said I don’t think Bitcoin has a future as an alternative currency but I don’t know if I’ll be right or wrong. What I know is that I don’t like the price to take the bet. Others take an alternative view, so, with the help of Luke Jones, chief executive of Coinarch, a soon to be launched Bitcoin investment platform, let’s consider why Bitcoin’s boosters think the price is right to back this new alternative.
Bitcoin offers the world exciting possibilities, particularly in the areas of global payments processing and secure transfer. But its core claim is that it will one day be a viable currency, borderless and free from government control.
That means Bitcoin needs to move past its current use as a payments processing tool to a realistic medium-term store of value. Its chief competitor is clearly gold.
Gold is loved the world over for its unparalleled ability to keep governments at bay; after all, not even the US Fed can print gold, no matter how useful this might be for quantitative easing.
Combined with gold’s innate ability to endure, this is what continues to draw investors to confidently buy and hold gold for the long term. But it’s not without problems. As Warren Buffet said, gold “gets dug out of the ground, … we melt it down, dig another hole, bury it again and pay people to stand around guarding it … Anyone watching from Mars would be scratching their head.”….. Read more
