Is Bitcoin's backdraft sucking the oxygen out of Gold & Silver?

Just thinking out loud...

Like many of you I've been watching bitcoins price go parabolic. I've also watched in bewilderment as the Precious Metals prices have bobbed up & down (but mostly down) each day when global events should of be sending them at least side ways or skyward haven't.

I realize the Bitcoin market is tiny compared against the value of the Precious Metals market. However I'm convinced a good many majority of those investing in bitcoins have come from the school of sound money. Perhaps longtime Precious Metals investors that have lost faith in the recent performance (or lack there of) Gold & Silver. To my limited understanding, even if a small percentage of traditional physical precious metals investors have liquidated a portion of their stack and poured that wealth into speculation on the price of Bitcoin, that has to have a significant overall effect on the price of precious metals.

So what's next? Will Bitcoin smash through $1000 in 2013? Will the sound money crew ride the Bitcoin elevator to the penthouse suite and then move (some of) the profits back into Precious Metals? Will this injection of capital reassert the traditional function of Precious Metals as a safe store of wealth?

 

Bitcoins have broken through the $250 mark....
I am in absolute shock as to why people are still flooding their hard earned cash to an intangible investment... not backed by anything. Blows my mind.

 

I kinda get how bitcoin is considered as a new alternative to physical pm. It works the same way as PM. And it's cost effective to do transaction. And it (supposedly) can't be confiscated.

Was thinking of putting a bit in for speculation after the price crashed to 1c, but never got to do it. Otherwise could have bought my dream house with cash! lol.. hindsight..

 

When crash to cents, I will join the club

 

Don't blame Bitcoin for silvers recent slide!, blame Cyprus.

 

Hmm. With the parabolic rise, comes a painful crash?

 

Yeh , I also shake my head ..A whole bunch of fresh air going ballistic...Not for me, Il stick with the hard stuff

 

Oh well, looks like the bubbles burst for bitcoin for the time being. To those who've bought low & sold high; Well played good Sirs. To the rest; You have my sympathies. God knows, I know what it's like to sit each day, months on end, in a position of net loss, holding out for the likely hood that your investment will reap you a reward one day. I hope for my sake & others that have held onto thier 'traditions' some of this new wealth now sloshing around the digital wallets of the Bitcoin boys & girls will make it's way back to the original vehicles of wealth preservation, Gold & Silver. Good thing it's on special this week.

 

I would say that's true.

I wouldn't say it's had any great effect. The percentages of most of our investments in bitcoin was generally small compared to PM's. There is some overlap in the markets, but not enough to have the effect you describe.

 

Old thread. Wished I'd listened to my inner cynic back then and started stacking BTC.

 

I was thinking the same thing: many investors kind-of left the PM market to try out Bitcoin and Litecoin.

But BTC dropped to 375 $ on BTC-e today. Litecoin seems to be holding on well.

At the beginning of the year, I saw Bitcoins for 20-30 $ on eBay and thought:
"Pffft... digital money... would rather keep my real money, not throw it away. Why need Bitcoins when you can have dollars, right?"

Now that would be like Dr.Evil (from the Austin Powers movie):
"Why make trillions when you can have billions?"

[youtube]http://www.youtube.com/watch?v=-vohNUTTx3A[/youtube]

:lol: Ha ha ha

 

I have zero interest still in becoming involved with Bitcoin et al, just as I have no interest in day trading.

We may be in a brand new world where value extraction is the aim versus value adding, but at this stage of my life my main aim is to reduce inflation and fraud theft from my savings.

This won't suit some, but one truism from Buffett is 'you get rich slowly'. When one measures shares in something like Woolworths vs bitcoin gains you realise that a little flutter might be fun but real money with limited risk is usually the better option.

 

Obviously this is not suited for everyone and is considered a highly speculative and high risk investment.
Best to stay clear if your risk profile is not in line and if you do not have a clear understanding of it.
Just like any other investment.

 

http://www.zerohedge.com/news/2013-12-16/bitcoin-banged-bear-market-again-precious-metals-rise

 

And the markets caps have what in common?
Lol
One can let a chart say anything!

 

I doubt anyone could get their money from an exchange fast enough to spend it on PMs within 30 - 60 minutes.

 

Funny to think though that precious metals might be a hedge against crypto.

 

Just read the start of this thread

 

the answer is yes absolute Bitcoins are sucking the life out of the PM markets.

PM will go nowhere for the next few years.