Is Bitcoin Greatly Rotating Into Bullion?

Tyler Durden's picture

While correlation is not causation, the coincidental timing of the tumble in virtual currencies and the surge in physical (alternative) currencies suggests another great rotation may be occurring... with gold at fresh 3-month highs as Bitcoin presses 3-months lows...



While not surprising, the chart above also shows the massive collapse in Mt.Gox pricing as the world and their virtual pet rabbit run for the exits...


Gold is now up over 12% from the post-Taper lows...


and Silver is exploding higher... up 15.6% now in February alone.


Charts: Bloomberg and Bitcoinwisdom

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max2205's picture

Should be a ton of comments on this one

fonestar's picture

....and no, Bitcoiners are not converting bits to bullion.  This is just another boring 50% crashy thing we've seen many times before.  The timing is just coincidence.

Croesus's picture


I agree with this statement: "Bitcoiners are not converting bits to bullion"...

The Gold market is lead by the "top of the pyramid", not the bottom, and correlation doesn't equal causation. 

While the BTC crowd certainly did well for themselves, the amount of money that moves in BTC is nothing compared to the billions that move in Gold, each and every trading day. 

The LBMA alone, was clearing close to $10 Billion/day in trading volume, and that was 16 years' ago. It's only gotten larger since then, as bank-guaranteed contracts for Gold have been underwritten for years, on the back of metal that's no longer there, and not cost-effective to extract from the ground (currently). 

People should stop and ask:

Why is Gold such an opaque market? What is the big secret? Why is there such a need to disguise the dealings of a "small market", for a "barbaric relic that isn't important these days"? Why the international secrecy, involving central banks, governments, and other 'top-level people'? 

fonestar's picture

Yes, Bitcoin is small peanuts when compared to GLD.  Who cares?  Should that be a detrimental thing for Bitcoin?  fonestar sees that as being more of a bullish type thing.

fonestar's picture

Gold is for 0lde Bitchez!

in4mayshun's picture

Fone-, you remind me of Al Gore still defending man made global cooling, oops I mean warming.

Know when to shut up dude.

fonestar's picture

fonestar never shuts up.  He is the Energizer bunny of Bitcoin trolls.

X-defiler's picture

Bitcoin deciples are truely the lunitic fringe. Believe me, I would be the firs to jump on the band wagon of anything that truely represented honest money. But to think that this thing that is at the mercy of the internet is the second coming is truely wacky. I think fonestar has over stayed his welcome. 

fonestar's picture

It is about time the lunatic fringe had propotional representation.

balanced's picture

PMs for storing wealth. Bitcoin for transactions.

SoberOne's picture

I came. I speculated.  I made great gains. I rotated. I sleep soundly.

Harlequin001's picture

Fuck me! gold's going to have to go up a lot to make up for those losses.

foodisgood's picture

The TV show Shark Tank has investors.

This place is full of naggers who 'revert to the mean' or arbitrage a 'market' and mistakenly call gambling an investment.

A sucker and his $ is soon parted.

naggers who whine about bigger gamblers than them go to ZH. Any here with an idea of what investment is would be laughed at by a more honest MSM broadcasting a game show of 10x any investment advice here.

What ever joke of an idea that could come from a place so full of stolkholm syndrome from the tyler publisher who is 'invisible' cause he has no spine or ability to pay any real Cost is why YOU are a gotdamnedmutherfukinnaggerslave2$.




The Vineyard's picture

The boys at Bitcoin flew too close to the sun.  Poor bastards.

Occident Mortal's picture

Bitcoin is not money, it's software. 

It's too easy for other people to compete with BTC with alternative digital currencies, and for this reason, digital currencies are too easy to dilute.


Also I don't think it's possible to launch a new currency and have the original issue be so centrally held. People will not adopt a new currency if they think there are people within the system who are making very large profits simply from being an early adopter.


When the euro was launched there was nobody who "made a killing" by being at the front of the queue. Everyone got converted at the same time and at the same exchange rates. This is an extremely important measure and BTC simply does not have it. The fact that a small number of people made a fortune by speculating on Bitcoin is a big turn off for the wider population.

Because of this, 95% of people will refuse to BTFATH, and any such new currency will be rejected  just as Bitcoin is being rejected/shunned by people now. Funnily enough people don't like being the bagholder for speculators.


The best thing that could have happened for Bitcoin would have been that it stayed at $10. The fact that it shot the moon has destroyed it.

GetZeeGold's picture





Gold is the capstone of the pyramid.....bitcoins is what's underneath the outhouse.

TheGoldMyth's picture

GetZeeGold:  Actually, the pyramid you are talking about (Supporting) is mind bogglingly distance below the other pyramid upon which we all depend including central banks who create artifical scarcity of gold by buying it all just to excite gold bugs.

That pyramid is called a clean planet with a working ecosystem.

Your pyramid is worth less. In fact it has negative worth and turns everything it touches into Lead or much worse.

Acet's picture

+1 This

Any scheme were there is some kind of token with no inherent value, were those who jumped earlier into the scheme hold more tokens and where the value of these tokens in exchange for money is larger the more adopters there are is in all definitions a pyramid scheme.

I don't care if you call it a digital currency or try to dazzle the techonologically naive with mentions of cryptography, distributed computing or Internet: Bitcoin is nothing more than a pyramid scheme with a networking component.

Note that even the behaviour of early adopters who try hard to get more people to join the scheme and who "sell" their idea to a large extent on the gains one can make by joining Bitcoin "before it goes up" is exactly the behaviour of members of a typical pyramid scheme.

The whole thing stunk years ago when I first heard about it and it still stinks.

rubiconsolutions's picture

"Bitcoin is not money, it's software"

Actually I think of Bitcoin as the Thomas Kinkade of the digital world. At some point there's going to be thousands of crypto currencies and many will be worthless.

fonestar's picture

Bitcoins are money and everything else is bullshit.

akak's picture

Fonestar is definitely not money.

Ergo, ....

Byte Me's picture

It is about time the lunatic fringe had propotional representation.

Feeling disenfranchised??

giggler321's picture

Percy created BTC in purest green expressed by one servant of Lord Black Addadder.  Remember the rainbow is full of color for you to choose along with a catchy name.

snr-moment's picture

3.2 volts, yeah, that's about right.

NoDebt's picture

You say a lot, but rarely anything that matters.  Not a word on the MASSIVE exchange rate differntial at Mt.Gox vs. other exhanges.  I would think you'd tackle that on top of the usual problems with BitCoins.  Mt.Gox, in particular, as an exhange, is basically shot all to hell.

Last trade on Gox: 284 as of this writing.

If you're going to act like a know-it-all troll, at least tell your legions of mindless followers to get their money out of Gox and into another exhange, if it isn't already too late.


fonestar's picture

Uh.. If you have been following fonestar's posts you would recall months ago he said he wouldn't go to Gox because of all the problems they've had.  MtGox is irrelevant now (except to idiots trying to use it as a sign Bitcoin is "crashing").  Nothing but good experiences so far on BTC-e but fonestar still wouldn't keep his coins on any exchange.

NoDebt's picture

DAYS ago, not months ago.  Gox's crash came as a complete surprise to you as it did to so many of the BTC faithful when Gox shut off the withdrawal taps.   Post up where you said it 2 months ago (the same timeframe where I DID post up selling out of BTC @ 865 on Gox during the parabolic upswing to over 1000) and I'll eat crow.

fonestar's picture

It came as a surprise to fonestar???  No it did not.. they suck and that was obvious to many a long time ago.

Advoc8tr's picture

Yep ... they burned us all years ago and haven't trusted them since.  Gox price has diverged because no-one can get their fiat or BTC out.  It's the US banking regulations that have always been the bugbear and accounted for the long term arb.

I note California has a bill in progress to make it legal tender. If that succeeds then it will become a lot easier for mainstreamers to play.

BTCTalks's picture

No serious coiners have been trading on the Magic The Gathering Online Exchange (MtGox) in months. Some gambled (and lost) that they could take in a risk less 10% arb. Clearly, it was not risk less as MFGox had tinkered with the underlying and began operating in a fractional reserve capacity. Still others are buying on Gox as we speak gambling that to hey will begin making good on coins again - I am not one of those.

Furthermore, for those still doubting bitcoin, remember that bitcoin is just the first killer app on the blockchain. The blockchain is like TCP/IP and bitcoin is the first app built upon it. Of course there are going to be tweaks necessary (bitcoin isn't even walking yet in human terms). But saying bitcoin has failed because of a crash in the value of the first app is ridiculous. This is like talking about the internet in 1989 when it took 2 days to send an email and very few people used it. I'm sure there were plenty we of people decrying the new technology then as well. Just imagine if you had gotten in on it instead? At least this time, I won't be left wondering.

sheikurbootie's picture

Buck Fitcoin and any other nonsense virtual money.  It's sad to see pathetic bridge buyers on ZH.

Saro's picture

"Gox's crash came as a complete surprise to you as it did to so many."

False. Gox is a joke to the greater Bitcoin community; nothing those idiots do surprises us anymore.  Next week I'm betting that it will come out that they no longer have coins in their cold wallet to handle all their demand deposits and the whole thing will go bust.

Dr. Venkman's picture

Fonestar, brudda , link us to yer warnings or STFU. Please

fonestar's picture

fonestar will neither confirm nor deny anything.

frankthomaswhite59's picture

4444001 fonestar

fonestar never shuts up.  He is the Energizer bunny of Bitcoin trolls.

boogerbently's picture

It's like saying your 4 year old is going to be president some day.

DoChenRollingBearing's picture

I'm old.  But, gold and BTC complement each other.

Gold might be better for old & rich bitchez!

fonestar's picture

As well as overtly sentimental people stuck in the past and averse to the simple fact that time still moves... forward.  People often wonder why fonestar refers to himself in the third person, it is not only because he is managed by a PAL but also a hat-tip to the fact that the Bitcoin network (now the world's most powerful network) is greater than our own selves.  The blockchain is boldly forging a new Bitstandard and pulling the luddites by the nose into the future.

There is no I in Bitcoin.

akak's picture

Please go play in traffic.

RideTheWalrus's picture

There's no coin in bitcoin.


Fish Gone Bad's picture

there is a c, an o, and an n in bitcoin.

foodisgood's picture

Time moves forward... so does that mean that gold does not and bitcon does?

Does that mean gold will vaporize and go to zero when the power goes out?

And the blockchain will be able to make it so transactions are not recorded into every wallet so forward folks will never have backward governments on the purchasing power?

Fonestarring fucktard is so smelly as the boytoy of the invisibly spineless tyler who is all about naggerdom.

fonestar's picture

fonestar does not read your posts, but he does junk you.

Bendromeda Strain's picture

There is no I in Bitcoin

Which makes it Bt Con. Real clever.

fonestar's picture

Well whatever, maybe it does have an I.