People are calling Bitcoin the digital version of Gold and they are not wrong. Not only does Bitcoin have many of the same qualities as Gold – it is extremely hard to mine, it is a great store of value and it has a stock to flow ratio similar to that of Gold. These similarities make Bitcoin a very good alternative to FIAT currency as well as making it as desirable as, if not more so, than gold.
Not only does it share similar looks to that of gold, it is also being stock piled for the long term by the whales of the crypto world, just like gold has been stock-piled for years by the whales of the FIAT world.
According to sources on Twitter (Shout out to Bitcoin archive) in the past 2 months, there have been reported transfers totalling almost $8 Billion in Bitcoin holdings moving to cold storage. For those of you that are not familiar with this term, Cold storage is like the retirement home of crypto-currencies and once Bitcoin goes there, its a sign that it won’t be coming back on to the market for a long time (If ever).
When you consider how similar Bitcoin is to Gold, its no surprise – with something that is so rare and such a perfect store of value, the smart investors out there – basically anyone who can see this value – are obviously going to HODL as much of this digital gold as they can get their hands on, on the basis that its always going to increase in value over time and the ONLY WAY to get Bitcoin in large amounts is to buy it, because its so rare.
Just to add to this situation with the snowball effect, what happens when something rare is reduced in terms of its availability? You guessed it, said thing becomes more rare and its value is likely to increase as a result.
At the time of writing, 1.40PM 21st March 2021, Bitcoin is $57,194.70 and rumour, or perhaps just my personal feeling, has it that Bitcoin is about to move.