Bitcoin – the new safe-haven currency of the world?

Who would have thunk it?

Definitely not me.

Over the last few weeks, with the combination of the Greek / Euro-zone crisis unfolding and Chinese stock market in turmoil, I was expecting a flight to the traditional safe-haven assets: Gold and Silver.

I was left scratching my head as I saw the spot prices for both Gold and Silver future contracts being driven down, despite reports that would suggest massive physical demand (e.g. solid demand for sovereign Gold coins in Europe and the US Mint announcing that they’re all sold out of Silver Eagles – on the 7th of July!).

I read various reports trying to explain this paradoxical situation. They varied from explanations of traders who were long Chinese stocks clicking the big “Liquidate Everything!!!” buttons on their margin accounts in panic, some of which included gold and silver future contracts in their portfolios, to reports claiming blatant manipulation of the gold and silver future markets.

Personally I’m feeling more and more convinced that the gold and silver prices are being manipulated. What legitimate holder of bullion, who is in his right mind, would dump more than USD 1 billion worth of gold and silver contracts in a single instant? And that on the same day that the US Mint suspends sales of Silver Eagle coins, due to overwhelming physical demand.

Which brings me to the almost hilarious point of this article – in the wake of all of these fascinating things happening around the world, just look what happened to the USD price of Bitcoin, as a bunch of desperate Greeks and a few slightly more forward thinking Europeans (I would imagine) are frantically looking for an alternative currency in which to conduct trade and stash their wealth.

Bitcoin - 60 day chart (bitcoincharts.com)

We live in interesting times.

Want to learn about Bitcoin? I did a fairly in-depth investigation of the currency a bit over a year ago. You can read the report here: Bitcoin?

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  1. Dips

    Where do you buy bitcoins from?

  2. Francois Viljoen

    @Dips: Here you go:

    http://liberta.co.za/blog/how-to-buy-bitcoin-in-south-africa/

  3. Dips

    Thank you. 🙂

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