Saifedean Ammous, the best-selling author of The Bitcoin Standard, says Bitcoin may take away demand from multiple safe-haven assets such as gold, real estate, and bonds.
In a recent SALT Talk video, Ammous explains how Bitcoin could emerge as the top store-of-value asset.
“I think demonetizing gold is a realistic goal and turning gold into an industrial metal, that can happen so Bitcoin can eat that market. It won’t mean gold will go to zero obviously. It will just become an expensive industrial metal.
You have to also remember that a lot more of global markets are essentially just looking for a store of value. They’re not looking for investments that yield returns… A lot of people buy homes that they don’t really need because that beats inflation and a lot of people invest in all kinds of things like bonds for instance.
Bitcoin could eat into the market for real estate. It could eat into the market for bonds, so these things could lose a significant amount of the demand that comes to them because people don’t have a solid store of value that can just be the base of your portfolio that you don’t take risks with. Bitcoin, if it grows into this kind of digital gold, it can offer people that. So you can imagine then it will reduce the demand for other markets, and then really the sky’s the limit.”
Ammous believes that the apparent vanishing of Bitcoin’s pseudonymous creator Satoshi Nakamoto is good for Bitcoin because it adds credence to the decentralized, uncontrollable nature of it.
“In my mind, the disappearance and the fact that the person who created this left is probably an essential part of what makes Bitcoin work…
I think the fact that there was nobody in charge and the project continued to survive is what makes it extremely tough because it’s what makes the monetary policy set in stone. It’s what gives it digital value because this is a network that is out of control of anybody. There’s nobody out there who can take over this network and change the money supply… So I think the disappearance of the creator was an enormously important factor in the growth of Bitcoin in a way in which it had become neutral and controlled by nobody.”
The author says Bitcoin shouldn’t be thought of as a big safety net from a bad financial system, but as a legitimately better system.
“We need to stop thinking about Bitcoin in terms of ‘This system is going to collapse and Bitcoin is the only answer.’ I think we need to think that this is just the better technology. This is just the more advanced system and it’s likely to take over just because a political settlement that is accessible and verifiable for anybody anywhere around the world at a very low cost is just a much more powerful proposition than having to go through political institutions every time you want to send and receive money and to go through political institutions that have a monopoly and that can devalue the currency.”
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