Gold has been slowly losing value since August 7, 2020. Is this because of Bitcoin? I think it is definitely possible.

The above chart is a TradingView chart.

Notice, we are at a huge support area. So what happens from here, I think, is pretty important for the future direction of Gold.

What Does Bitcoin Have to do With Gold?

It is no secret that talk surrounding Bitcoin, is its potential to replace gold as "the" store of wealth. Great investment minds like Ray Dalio have recently acknowledged the potential of Bitcoin. You can read his letter explaining to his investors what his thoughts are on BTC, here. 

So what makes Bitcoin so appealing, where gold lacks? Here are my opinions:

1) Gold is a limited "thing". But how limited is it? The truth is, nobody knows. Sure, there are guestimates of how much gold there is left to be mined. With just a quick Google search, you can find numbers like these from the BBC. But how accurate are they? How can we, as human beings with tons of errors to our names, possibly know how much gold there really is? It wasn't all that long ago when people were saying that oil will run out within a decade. Well, new oil reserves still pop up from time to time.

2) We know EXACTLY how many Bitcoin there are, or will ever be. We also know when the last Bitcoin will be mined due to the Bitcoin protocol. This thought alone entices people, as we are creatures who look for certainties; we don't like "what ifs". We want to know answers to everything.

3) Putting number 1 and number 2 together, it is much easier to value something if you know exactly how much there is. 

Why is  Bitcoin Starting to Appeal to More and More People?

In my opinion, it is simply the fact that we as a society have lost a lot of faith in our governments. This does not just apply to the United States; Look around the world.

Just today, in fact, Bitcoin searches in Turkey shot up 566% after the Turkish Lira dropped 14%.

Here in the States, we keep printing USD like it's going out of style. It's as though Jerome Powell and Company have this belief that our dollar is invincible. Shitty monetary policies will eventually catch up to us.

With Bitcoin, however, there is no central authority screwing with the value of it. The value of it is derived from simple, and basic, supply and demand fundamentals. The less the supply, when coupled with high demand, and you get soaring prices like we are seeing right now.

Conclusion

So is Bitcoin the reason gold is falling? The answer: I don't know for certain, but I am leaning towards it definitely being a contributing factor.

Bitcoin, in my opinion, will NEVER be an "everyday" currency. It is far too slow and, far too antiquated already. Yes, I just called Bitcoin antiquated. Why? Because look around you; look around the Crypto Universe and how far the technology has come in just 10 short years. We now have coins that are capable of transacting 10's of thousands of transactions per second. Bitcoin, however, can transact nicely at a slugs pace of 7 per second.

But, I don't think Bitcoin is going anywhere, because it, in my opinion, will eventually replace gold as "the" store of wealth. It is PERFECTLY suited to be just that - a store of wealth. I don't like gold for a multitude of reasons; I named a couple of them up above. But what I really don't like, is it's never truly been the backing for fiat. This is a myth that people tell themselves for some unknown reason.

Check this Investopedia article out about fiat NOT being backed by gold.

Anyway, it looks and feels as though Bitcoin is starting its life off as a store of wealth. Gold was transformed into a store of wealth, due to it's history with certain cultures, and it's rise to being some kind of mythical rock. It's just unreliable in my opinion; and it has absolutely nothing to do with rarity. In fact, Platinum is more rare than gold, but it is quite a bit cheaper per ounce. 

In closing, I'd just like to say that I am a fan of Bitcoin. I like it as a store of wealth, but NOT as an "everyday" currency. And I do feel like it has something to do with golds demise since last August. But this does not mean that gold won't regain the $2,000 per ounce mark. Anything is possible, and I don't decide those types of things: Mr. Market decides that stuff.

I am not a financial adviser, and none of this was financial advise. ALWAYS do your own research.