According to a May 26 tweet from a Messari researcher, goldbugs like Peter Schiff have been missing a trick.
Over the past year, returns on stocks in gold mining companies have massively outperformed the return on actual gold.
Fans of Bitcoin however, can rest safe in the knowledge that stock in Bitcoin mining companies has tended to underperform the genuine article.
At first glance the performance of gold over the last twelve months seems quite impressive, with gains pushing close to 40%. That is, until one considers the stock of gold mining companies like Newmont, Franco-Nevada, Wheaton Precious Metals and Barrick.
These four companies have averaged almost 120% returns in the past year, effectively acting as a leveraged position on physical gold, with three times the gain.
In contrast, Bitcoin price is up around 25% compared to a year ago, although if we only consider figures since the start of 2020 it is outperforming gold by a factor of two.
Stock in Bitcoin mining companies has not fared so well.
Looking at Riot, Canaan, Hut 8 and Hive, only Hut 8 has had positive returns over the last 12 months, being roughly similar to BTC's 25%. The other three stocks averaged a drop of over 40% each, underperforming Bitcoin by a large margin.
So for all of their evangelism, it seems that the goldbugs' desire for physical gold is blinding them to the potential of investment in gold mining companies.
The Bitcoiners? Well they could always wrap the Bitcoin, use it to take out a DeFi loan, and spend that on gold mining stocks, thereby exposing themselves to both leveraged gold gains and BTC gains.
Goldbugs Better Buying Mining Stocks, Bitcoiners Can Stick to Bitcoin
gepubliceerd op May 27, 2020
by Cointele | gepubliceerd op Coinage
Coinage
Vermeld in dit artikel
Recent nieuws
Alles zien
Blockchain Bites: Bitcoin's Run, Uniswap's Hemorrhaging Value, Anchorage's Banking Bid
Bitcoin is nearing all-time highs in price and market cap last set three years ago.
Japan's megabanks to lead experiment with digital yen
We have, in order, Cheese Bank with a $3.3 million theft, Akropolis with its $2 million loss, Value DeFi with a whopping $6 million exploit and finally Origin Protocol's loss of $7 million.
Number of new Bitcoin addresses spikes amid growing FOMO
Japan's three largest banks, as part of a group of 30 private sector actors, are set to collaborate on an experiment with a digital yen.
Not just Wall Street: Quant trader explains why Bitcoin price is going up
Sam Trabucco, a quantitative trader at Alameda Research, believes four general factors are pushing up the price of Bitcoin.