Russia is considering creating a gold-backed cryptocurrency to build an alternative international payment system as the country continues to seek a path toward de-dollarization.
According to the Russian news agency TASS, Governor of the Bank of Russia Elvira Nabiullina said the bank would consider a proposal for a gold-backed cryptocurrency at the request of the State Duma (the lower house of the Federal Assembly) even though the bank would prefer to advance payments in national currencies.
A recent video ad produced by a digital currency asset company titled “Drop Gold” created some waves on social media last week. The ad encourages investors to drop gold from their portfolios and replace it with digital currencies such as Bitcoin. “In a digital world, gold shouldn’t weigh down your portfolio,” the ad proclaims.
But is Bitcoin really a replacement for gold? While the Drop Gold ad may seem clever and cute, cryptocurrencies aren’t a replacement for gold.
Bitcoin investors are selling cryptocurrency and buying gold, according to a number of investment analysts.
“I do think that Bitcoin pulled a little bit of demand away from gold last year, in 2017,” Jan Van Eck told CNBC’s ETF Edge last week. “Interestingly, we just polled 4,000 bitcoin investors and their number one investment for 2019 is actually gold. So gold lost to bitcoin and now it’s going the other way.”
What’s going on in precious metals markets? Is a recession looming? If so, what does that mean for gold and silver?
In this episode of It’s Your Dime, Mike Maharrey talks to precious metals and investment expert Chris Blasi about these questions and much more.
Bitcoin dropped below $4,000 as a massive selloff in the cryptocurrency market continued over the Thanksgiving weekend.
The price of a bitcoin fell as low as $3,604 during the sell-off. It has lost some 80% of its value from highs reached late last year when the price of bitcoin eclipsed $20,000. Bitcoin has fallen 40% in just two weeks of November. It was the worst price drop since April 2013.
Other cryptocurrencies including ethereum and ripple have seen similar price drops.
Yesterday was another bad Monday on Wall Street. The Dow Jones dropped nearly 400 points and the NASDAQ fell deeper into “correction territory,” dropping another 3%. All five “FAANG” stocks closed in bear territory. These are the tech stocks that have propelled the long bull market. The NASDAQ is down 12.5% this quarter.
Apple’s announcement that it plans to cut production weighed heavily on the markets, along with another sign of trouble in the housing market — a big drop in homebuilder sentiment.
Peter said homebuilder sentiment is the first sign that the confidence bubble has popped.
A Russian lawmaker has suggested his country should develop a gold-backed cryptocurrency for payment of arms exports and other goods as a way to circumvent Western sanctions and limit his country’s dependence on the dollar-based global banking system.
Vladimir Gutenev serves as first deputy head of the economic policy committee at the State Duma – the Russian Parliament’s lower chamber. He suggested Russia should develop a gold-backed cryptocurrency as he called for a suspension of treaties with the US, including the non-proliferation of missile technologies agreement.
Paul Krugman said gold is dead. In fact, “Bitcoin has more utility than gold,” according to the popular lefty economist.
Krugman made the comments at ChainXChange, a blockchain artificial intelligence and innovation conference in Las Vegas.
Will bitcoin someday replace gold as the preeminent store of value?
One economics professor said it won’t because it will become more and more vulnerable to attack as its value increases.
University of Chicago economics professor Eric Budish lays out his case in a National Bureau of Economic Research paper titled “The Economic Limits of Bitcoin and the Blockchain”
Bitcoin and the blockchain are joined at the hip – so much so that a lot of people don’t distinguish between the two. Cryptocurrency and blockchain have almost become synonymous. But in fact, they are two different things, and it’s important to understand the distinction.
The blockchain is a technology. Cryptocurrency is a medium of exchange or a store of value that operates on that technology. You can have a blockchain without cryptocurrency, but you can’t have cryptocurrency without a blockchain. In fact, there are a lot of other possible uses for the blockchain beyond serving as a platform for bitcoin.