A few months ago, during a member-guest golf tournament, I asked a simple question to everyone I played with and drank with (which was a lot): If you had to hold one asset for ten years—no selling, no trading—would it be gold or Bitcoin?
Wasnt talking about the miners. As you may Newmont is my biggest public equity position. I’m talking about that which they mine: the gold. I own Newmont because operators get 2-3x leverage on the ups when a commodity goes up, my biggest oil and gas lesson.
Bitcoin I own because there are no public ally trader miners that sell it after capturing the arb…
In a way, my real estate development thesis is the same. Mine new houses and sell the arb. Owning the house gives you a place to live but a lower return ….
So true. The vast majority of gold trade is via the miners. Very few outsude of central banks hold the hard asset itself. (Except in the gold markets of Dubai where it is used in all manner of feminine intimate garments.)
Cleanest dirty shirt or best looking horse in the glue factory......don't hear either used very often. Have a good Monday, glad you are back to writing more often.
I fall firmly in the middle category and my answer is I would own neither. But since that's not one of the options I would choose gold. As you have stated it's really a question about trust. Prior to reading Going Infinite (Michael Lewis's book on Sam Bankman-Fried and FTX) I might have been 50/50. But reading this book (which I would highly recommend) raises some major trust issue on just who and how the crypto markets are run and what type of accountability exists.
Not quite 5 ... but it was a long time ago. I definitely look forward to seeing your blog posts and being challenged to think a little deeper on these topics.
I have nothing against bitcoin as its much better than fiat but gold (silver is actually better for use in everyday purchases) is actually tangible. Bitcoin exists only when there is electricity and network connectivity in order to transact and verify the transaction on the blockchain. If you have neither you can't effectively use it as it needs to reconcile the transaction with the blockchain at some point. So from the standpoint of useablity under a black swan event gold (and silver) is much better inurance.
I am certainly no expert on cryptocurrency, but I try to boil things down to their essence.
It seems to me that Bitcoin is essentially a scam that took off due to the inherent security of the underlying Blockchain technology. It is essentially a stock in an imaginary company that produces nothing and therefore has an infinite P/E ratio.
People say that it has value because, unlike dollars, the shares are strictly limited and no more can be created -- but they were an imaginary fabrication to start with! I could just as easily declare a fixed number of "RussellCoins" and start selling them. Would that make them worth something?
Now that it has caught on, Bitcoin is worth something, but it started as essentially a scam, a ruse. The early investors made out like bandits because that's what they were. It was a Ponzi scheme based on the "greater fool theory".
As you know, investing in the stock market involves technical and fundamental analysis. The fundamental analysis pertains to the value that a company provides or may eventually provide, and the technical analysis involves public perceptions and guesses about how the stock will trade in the future. Bitcoin is all technical and no fundamentals because there are none.
As for gold, there are some fundamentals because it does have some use, both for jewelry and electronics, although those uses may be minimal compared to the actual valuation. In that case the technical analysis dominates the fundamentals.
That's how I see it anyway. Am I missing something?
However we got here … I think we are here now. A $2+ trillion asset class. You can believe it or not. Question motives or not. But I’m just saying it’s fairly similar to gold. Not identical. But bitcoin actually has some transactability component. Most people don’t own the physical gold so it’s similar to a digital asset.
Cryptocurrency has its legitimate uses as a hedge against inflation I suppose. As I said, I am hardly an expert. As for gold, I have never owned much, and I am confused about how best to invest in it. As you said, if you don't own the physical gold, how do you really know you own anything? And if you own the physical gold, you are taking a chance of losing it or having it stolen. You can use a safe deposit box I suppose, but how secure is that for large quantities? I don't know.
That does not look good for Trump, but at this point he has been the victim of so many phony charges that I have to be skeptical about this one. And coming from someone who worked in the Biden administration with the auto-pen pardons, that is rich.
But if they had bought $2billion in gold, It would barely move the needle. The currency didn't exist and then this investment by the UAE made it legitimate overnight.
I compare it to Bill clinton all of a sudden getting $450k speaking engagements when Hillary was secretary of state.
The fact is gold will still be here when President Trump leaves office. Will this investment exist as well? I feel there is just too much of this background stuff going on to know what is a legitmate investment vs pure speculation that could collapse at anytime.
Vibes of an old Johnny Cash song. I woke up this morning and put on my cleanest dirty shirt, and the beer I had for breakfast wasn’t bad so I had one more!
This article comes at the perfec time. Your observation about the generational fault line is so spot on. That Blockbuster analogy? Genius. It's like watching a mainframe enthusiast explain why cloud computing will never work. Very insightful about both assets simply 'relying on belief'.
Thank you David. Bitcoin trades at a price completely set by sentiment.
Gold miners trade on market fundamentals such as cash flow, profits and assets reported on the balance sheet. They are real businesses.
No such reporting or transparency applies to any crypto currency, at least to my knowledge.
Wasnt talking about the miners. As you may Newmont is my biggest public equity position. I’m talking about that which they mine: the gold. I own Newmont because operators get 2-3x leverage on the ups when a commodity goes up, my biggest oil and gas lesson.
Bitcoin I own because there are no public ally trader miners that sell it after capturing the arb…
In a way, my real estate development thesis is the same. Mine new houses and sell the arb. Owning the house gives you a place to live but a lower return ….
So true. The vast majority of gold trade is via the miners. Very few outsude of central banks hold the hard asset itself. (Except in the gold markets of Dubai where it is used in all manner of feminine intimate garments.)
“The truth is the U.S. is the cleanest dirty shirt.” I love this line!
Well written as usual.
Cleanest dirty shirt or best looking horse in the glue factory......don't hear either used very often. Have a good Monday, glad you are back to writing more often.
Thank you. I’ve missed it too!
I fall firmly in the middle category and my answer is I would own neither. But since that's not one of the options I would choose gold. As you have stated it's really a question about trust. Prior to reading Going Infinite (Michael Lewis's book on Sam Bankman-Fried and FTX) I might have been 50/50. But reading this book (which I would highly recommend) raises some major trust issue on just who and how the crypto markets are run and what type of accountability exists.
Always nice to see your name in the comments. Anadarko feels 5 decades ago…
Not quite 5 ... but it was a long time ago. I definitely look forward to seeing your blog posts and being challenged to think a little deeper on these topics.
I have nothing against bitcoin as its much better than fiat but gold (silver is actually better for use in everyday purchases) is actually tangible. Bitcoin exists only when there is electricity and network connectivity in order to transact and verify the transaction on the blockchain. If you have neither you can't effectively use it as it needs to reconcile the transaction with the blockchain at some point. So from the standpoint of useablity under a black swan event gold (and silver) is much better inurance.
I am certainly no expert on cryptocurrency, but I try to boil things down to their essence.
It seems to me that Bitcoin is essentially a scam that took off due to the inherent security of the underlying Blockchain technology. It is essentially a stock in an imaginary company that produces nothing and therefore has an infinite P/E ratio.
People say that it has value because, unlike dollars, the shares are strictly limited and no more can be created -- but they were an imaginary fabrication to start with! I could just as easily declare a fixed number of "RussellCoins" and start selling them. Would that make them worth something?
Now that it has caught on, Bitcoin is worth something, but it started as essentially a scam, a ruse. The early investors made out like bandits because that's what they were. It was a Ponzi scheme based on the "greater fool theory".
As you know, investing in the stock market involves technical and fundamental analysis. The fundamental analysis pertains to the value that a company provides or may eventually provide, and the technical analysis involves public perceptions and guesses about how the stock will trade in the future. Bitcoin is all technical and no fundamentals because there are none.
As for gold, there are some fundamentals because it does have some use, both for jewelry and electronics, although those uses may be minimal compared to the actual valuation. In that case the technical analysis dominates the fundamentals.
That's how I see it anyway. Am I missing something?
However we got here … I think we are here now. A $2+ trillion asset class. You can believe it or not. Question motives or not. But I’m just saying it’s fairly similar to gold. Not identical. But bitcoin actually has some transactability component. Most people don’t own the physical gold so it’s similar to a digital asset.
Cryptocurrency has its legitimate uses as a hedge against inflation I suppose. As I said, I am hardly an expert. As for gold, I have never owned much, and I am confused about how best to invest in it. As you said, if you don't own the physical gold, how do you really know you own anything? And if you own the physical gold, you are taking a chance of losing it or having it stolen. You can use a safe deposit box I suppose, but how secure is that for large quantities? I don't know.
Thought the 60 minutes episode last night showed an example of how it works, and how a backing can make 80 million a year doing nothing. https://www.cbsnews.com/video/trump-pardon-changpeng-zhao-60-minutes-video-2025-11-16/?intcid=CNM-00-10abd1h
That does not look good for Trump, but at this point he has been the victim of so many phony charges that I have to be skeptical about this one. And coming from someone who worked in the Biden administration with the auto-pen pardons, that is rich.
There are a bunch of articles that reported the investment last spring. So no doubt that it occurred as did the pardon this summer. https://www.theguardian.com/us-news/2025/may/02/abu-dhabi-firm-binance-trump-stablecoin
But if they had bought $2billion in gold, It would barely move the needle. The currency didn't exist and then this investment by the UAE made it legitimate overnight.
I compare it to Bill clinton all of a sudden getting $450k speaking engagements when Hillary was secretary of state.
The fact is gold will still be here when President Trump leaves office. Will this investment exist as well? I feel there is just too much of this background stuff going on to know what is a legitmate investment vs pure speculation that could collapse at anytime.
Vibes of an old Johnny Cash song. I woke up this morning and put on my cleanest dirty shirt, and the beer I had for breakfast wasn’t bad so I had one more!
This article comes at the perfec time. Your observation about the generational fault line is so spot on. That Blockbuster analogy? Genius. It's like watching a mainframe enthusiast explain why cloud computing will never work. Very insightful about both assets simply 'relying on belief'.