The last few years have seen massive gold repatriation efforts by major economies take place. The sheer scale of the operations required to securely move billions of dollars worth of bullion neatly highlights the advantages of Bitcoin over the shiny, yellow metal.
Since 2014, several notable countries have taken back control of their gold reserves. Amongst them are the Netherlands, Turkey, Germany, and Poland.
Like a Military Operation
In November 2014, according to gold mining publication Mining.com, the Dutch central bank moved gold reserves worth more nearly $5 billion at the time. Starting in New York, the total amount of bullion would only end up in Amsterdam months later. Some described the couriering as being like a military operation in scale.
Other more recent efforts will have required no less effort on the part of the repatriators. Holland’s reserves weighed around 122 tonnes. When Poland moved its own gold back from the Bank of England last November, it had a similar weight to transport.
Germany and Turkey, on the other hand, held much larger reserves at the Federal Reserve. In fact, Germany’s repatriation efforts were on such a large scale that they began in 2013. Ships brought the last 100 tonnes of 743 from New York in August 2017. Similarly, Turkey moved 220 tonnes in the same year.
Such movements of gold illustrate a growing distrust in the US dollar. More countries are making efforts to move away from the fiat currency. BeInCrypto has previously reported on other such efforts regarding Bitcoin being a simpler way to move value.
However, colossal repatriation efforts also highlight gold’s shortcomings. As pointed out by Twitter user NVK (@nvk), physical assets, like gold, need transporting. Being incredibly heavy, this isn’t easy. Being immensely valuable, the task requires a high level of security too. Again, this adds to the expense.
As we’ve seen by the above gold repatriations, moving billions in gold requires planning and massive logistics efforts. It can take years to move large sums.
That’s a lot of yellow lead to move around.
Bitcoin is sooooo much easier. https://t.co/BQusuT2j1j
— ECC OPTIMISM
(@nvk) January 19, 2020
Moving Bitcoin Versus Gold
With its finite total supply, Bitcoin offers a similar value proposition to gold. However, thanks to its purely digital nature, it improves on the precious metal by being massively more portable, easy to store, and divisible. Many people have, therefore, argued before that Bitcoin functions as a digital gold.
The only thing that Bitcoin lacks when compared to gold is historical precedence. Trust in gold was established over thousands of years. Bitcoin has only been around for eleven years.
If it continues to function as it has, trust in Bitcoin will surely grow. As trust grows, it stands to reason that so too would the asset’s market capitalization.
Already, the growth of trust in the network has seen several large periods of market expansion. From just fractions of a cent per Bitcoin in its infancy, each BTC now trades for more than $8,500. It’s the growth in trust that explains why each time that a speculative bubble bursts, the price returns to a low that was higher than prices before the mania and why BTC has outperformed gold so dramatically too.
Since 2015 gold is down -97% when measured in bitcoin.
— Preston Pysh (@PrestonPysh) January 19, 2020