Time to Get off The Crashing Cryptowagon And Jump on The Goldwagon

The comments below are an edited and abridged synopsis of an article by Egon von Greyerz

Is the $32-billion collapse of the crypto exchange FTX the catalyst for the fall of the financial system? We will soon know, but at least the gold/crypto debate was settled for those who believed crypto represented wealth preservation.

Time to Get off The Crashing Cryptowagon And Jump on The Goldwagon - BullionBuzz - Nick's Top Six
Downfall of cryptocurrency. Unknown man with a hood and chart showing loss of value, dark background

Von Greyerz has always said that crypto was a binary investment; Bitcoin could go to $1 million or to zero, so not a good risk and certainly not an investment for the fainthearted.

FTX investors were names like Blackrock, Lightspeed Venture, Brevan Howard, Tiger Global, SoftBank and the Ontario Teachers’ Pension Fund. Most of these big investors understood the risk, but greed and fear of missing out also attracted everyday investors.

For the average pension fund manager, it is always safe to do what other major investors do regardless of whether a particular investment goes to zero. Interestingly, no pension fund is interested in physical gold despite the fact that gold is not only the perfect wealth preservation investment, but also an excellent hedge to balance a portfolio.

More importantly, in times of high inflation and falling asset markets, gold acts as an excellent inflation hedge.

Twelve months ago the total crypto market was worth $3 trillion. Today, one year later, the market is worth $885 billion, a fall of 70%. Von Greyerz doesn’t mean that it is worth this amount, but investors seem to think so. He says it has no intrinsic value at all.

Up for discussion: Next Bitcoin target $3-5K on the way to zero; pension funds buy crypto but not gold; crypto—just another popular delusion; stocks, bonds and property—the next dominos to fall; a disorderly reset; and no currency has ever survived in history.

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