The bitcoin marketing machine has tried just about every trick in the book to convince naive young investors that bitcoin is digital gold. One not so subtle ploy is, well, calling it “digital gold”. Another appeals on a slightly more subliminal level. Articles in the mainstream financial media about bitcoin are ubiquitously headed with a picture of a gleaming golden coin.
This machine plays on the inclination of every young generation to reject the preceding’s values. The oldies don’t get it. Only those enlightened in the new ways do. That the oldies might have been there before doesn’t seem to occur to them. Only a mind set like that could be such fertile ground for the notion that a 15 year track record beats 5000.
But much more objective fact shoots the digital gold meme full of holes. Bitcoin prices correlate much more closely with tech stocks than they do with gold. Today for instance gold rose 1.38%. The NASDAQ stock index, home to many tech stocks, declined 2.88%. Bitcoin declined 8.76%.
In fact bitcoin generally correlates much more strongly with stocks (risk assets) than gold. The next time you hear bitcoin hyped as digital gold, ask why. If you get any answer at all, it’s more likely to resemble a pretzel than a straight line.