The Gold Standard: A Flashback to the 1970s

Remember the 1970s? Bell bottoms, disco balls, and a little thing called stagflation hit the world hard. Gold made headlines after the dollar completely detached from it in 1971, and it might be time for a little déjà vu—this time with Bitcoin in the spotlight. According to the latest insights from Capriole Investments, Bitcoin is on deck for an explosive breakout akin to gold’s glory days.

Capriole’s Optimistic Outlook on BTC

Despite Bitcoin’s notorious 80% decline from its peak of around $69,000, not all analysts are throwing in the towel. Capriole asserts that 2023 is gearing up to be a pivotal year for Bitcoin as a reserve asset. But how can they be so confident when the market seems to be playing in dreary notes?

• Historical Patterns: Looking to the past, especially the dollar’s rocky separation from gold, reveals trends that Bitcoin could mirror.
• Market Cap Comparison: Bitcoin now sits at just 2.5% of gold’s market cap. If you think that’s a fluke, think again—this means room for some monumental leaps.

Bitcoin vs. Gold: The Ultimate Faceoff

In recent analyses, Bitcoin has been likened to the tortoise in a race with the gold hare—both valuable, but one lesser-known and yet to hit its stride. Bitcoin’s market cap remains a mere fraction of gold’s, meaning even a slight shift in demand could send its price soaring.

“Given Bitcoin represents just 2.5% of gold’s market capitalization today, its 80% drawdown adds a mere 2% additional drawdown to the combined hard money (gold + Bitcoin) drawdown,” Capriole noted.

The Great Allure of Bitcoin’s Hardness

Capriole isn’t just throwing darts at a board when it comes to Bitcoin’s perceived value. The notion of Bitcoin as “the hardest asset in the world” isn’t just fluff; it’s backed by its dwindling inflation rate compared to gold. As we shift away from traditional methods, Bitcoin promises instant transactions and versatility.

A New Wave of Investment

As we prepare for Bitcoin’s block subsidy halving in 2024, the narrative strengthens: Bitcoin could soon be regarded as the most desirable hard asset. Analysts like Saifedean Ammous, who authored The Bitcoin Standard, aren’t just writing another investment guide—they’re heralding a monetary revolution.

Forecasting the Future: What’s on the Horizon?

Capriole’s fiery prediction? They anticipate Bitcoin could see similar price surges as gold, which flourished by a whopping 24 times in the 1970s. With today’s economic landscape and digital currencies in the mix, could Bitcoin facilitate an even greater upward swing than its dated counterpart? Only time will tell!