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  • Writer's pictureMichael Bacina

Aussie press muses Bitcoin as a gold replacement...

Updated: May 3

With Bitcoin's meteoric price rise over Christmas and the New Year, today kicked off with two of Australia's more conservative media outlets musing on whether Bitcoin is a stable asset.

The usually critical-of-digital-currency Financial Review (paywall) pondered the reasons for Bitcoin's price shooting up while the right-leaning masthead The Australia reproduced a Times article comparing Bitcoin to gold as a safe haven asset.

The FinReview posited three reasons for Bitcoin's rise:

  1. Fear of Missing our (FOMO) Companies like Microstrategy putting hundreds of millions into Bitcoin, Square buying USD$50M and Paypal offering Bitcoin purchasing within their app (for US users) and GrayScale Trust buying more Bitcoin than is being mined (leading to persistent buying pressure) there is an institutional backing to Bitcoin which has never been seen before.

  2. Demand for Inflation Hedges Global M1 Money Supply has increased significantly this past year. Bitcoin's attractive fixed supply of 21 million Bitcoin programmed into the source code for the Bitcoin blockchain in a way that cannot be altered (absent more than 50% of the Bitcoin miners agreeing to do so and wrecking confidence in the system) provides an extremely handy inflation hedge in Bitcoin which, critically, involves no intermediary offering a complex product and close to zero counterparty risk. The positions taken in Bitcoin can be reversed in a liquid market.

  3. Increased legitimacy Citing the US Comptroller of the Currency's recent letter approving bank handling of stablecoins, the FinReview is recognizing the increasing normalisation of digital currencies and Bitcoin is the leading currency in that space.

The Australian meanwhile hews closer to their traditional business oriented approach republishing a piece from The Times (paywall) and puts emphasis on the "dentist" and "hairdressers" talking about Bitcoin, and quoting Ruth Crowell, CEO of the London Bullion Market Association as saying, when asked if Bitcoin will replace gold "Ask us again in 200 years". Naturally if you asked lawyers whether they will be replaced by technology, you might get a similar answer.

The Australian cites the past extreme price volatility of Bitcoin as a further mark against it being considered a "digital gold" and erroneously claims:

it is impossible to gauge precisely the institutional interest in bitcoin because transactions take place anonymously

I'm not sure how many times it has to be said:

Bitcoin transactions are pseudonymous, not anonymous. A very important distinction.

The Australian does then cite three likely price impacting events, upcoming figures from Grayscale Bitcoin Trust, Paypal's Q4 report and Square's Q4 report.

While the future is plainly on blockchain, a warming of Australia's financial and business oriented news-media to digital currency is to be welcomed and applauded.


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