Bitcoin Will Flip Gold – Former Coinbase CTO Explains Why

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As a seasoned analyst with years of experience in the financial industry, I find Balaji Srinivasan’s prediction intriguing and plausible, albeit bold. Having worked extensively with traditional assets like gold, I can attest to the logistical challenges that come with handling large quantities of physical gold. The ease of transferring digital assets like Bitcoin, as highlighted by Srinivasan, is indeed a game-changer.

Previously serving as the top technology executive at one of the biggest cryptocurrency exchanges in the United States, Coinbase (Balaji Srinivasan), recently expressed a significant opinion regarding Bitcoin. He foresees that Bitcoin could surpass gold in terms of value and function as an asset in the future.

He highlighted that Bitcoin has already reached the status of a global reserve asset and explained why investors and even nations will eventually pick BTC over the most popular precious metal – gold.

“Bitcoin is already the global reserve asset”

In his assertion that Bitcoin serves as the world’s leading digital currency, Srinivasan presented an argument emphasizing its accessibility: Anyone, anywhere, can buy or sell Bitcoin in any quantity at any given moment using various devices, all without requiring a middleman for the transaction and knowing exactly what the price will be.

“Nothing else is like this,” he said.

To consider the practicalities: Moving $10M worth of physical gold involves safely transporting gold bricks across borders and selling them at a physical exchange.

— Balaji (@balajis) December 11, 2024

Bitcoin to flip gold, per Srinivasan

The primary reasons proposed by the ex-CTO of Coinbase for Bitcoin potentially outperforming gold in the future revolve around logistics and liquidity. To sell large quantities of gold, like $10 million worth, he pointed out on Twitter, physical gold must be securely transported across borders to a gold exchange, which can be cumbersome and time-consuming. Bitcoin, on the other hand, can be easily transferred electronically without these logistical challenges.

Using Bitcoin allows you to quickly locate a potential buyer anywhere globally with just a few simple clicks. Additionally, selling Bitcoin valued at $10 million can effortlessly be divided among numerous buyers or sold to a single one, depending on your preference.

Balaji Srinivasan used Germany’s transfer of 3,378 tons of gold from New York’s Federal Reserve between 2013 and 2020 as an example, highlighting that the process was vastly different when compared to Bitcoin transactions: “From years and millions of dollars to mere minutes and a few tens of dollars for transaction fees,” he stated. The gold had initially been transported to the U.S. during the Cold War as a safeguard against it being seized by the Soviet Union.

Additionally, Srinivasan pointed out that unlike large crypto exchanges, which have previously faced crashes due to massive buy and sell orders, handling such volumes of gold trades would be impractical because many individuals physically trade their gold bars, making it impossible for them to all bring their gold to the exchange at once, as he put it, “They simply couldn’t do it.

In simpler terms, the ex-CTO of Coinbase asserts that the market fluidity of Bitcoin exceeds that of gold by at least a factor of 1,000 and possibly as high as 10,000 times. This is why he thinks that in the future, Bitcoin may replace gold in terms of market dominance.

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2024-12-11 18:21