Will a crash in the price of Bitcoin help or hurt the price of gold?
Yes, I know, some people think Bitcoin is undervalued.
These are financial hedge fund types who buy it and then tell the public it is going to double or triple from here.
That’s like me buying 1909-S VDB cents and then going on TV to tell the public they are going to triple in value.
What is not in doubt is that Bitcoin is in the headlines.
It was up by a factor of 8 since the beginning of the year.
It is now knocking on the door of $10,000. That puts it up by a factor of 10 this year.
A 20 percent rise in less than two weeks has gotten everyone’s attention.
A reader emailed me a link to a primer about Bitcoin.
He might have missed my Nov. 20 blog.
What goes up, must come down, as the old saying goes.
The only question is when.
I expect it will be far enough in the future that critics can laugh at me and say I am wrong.
But when it does come down, what will it do to gold?
Another form of this question is: do current owners of Bitcoin also own any gold?
If you are a hard money type, you had better hope they do not.
The iron rule of financial crashes is that owners of assets that are plunging are forced to sell other assets to stay solvent.
If that other asset happens to be gold, its price could drop.
If the other assets are stocks, well, that could bring stocks lower.
In this case, it would benefit gold.
When stocks get shaky, gold is usually a tower of strength.
I have no way to know what other assets Bitcoin owners hold.
I hope it is not gold or silver or any other metal that will impact the bullion market directly and the numismatic market indirectly.
Numismatics has been in the commercial doldrums for much of this year.
We do not need a Bitcoin crash to hurt us further.
Buzz blogger Dave Harper won the Numismatic Literary Guild Award for Best Blog for the third time in 2017 . He is editor of the weekly newspaper "Numismatic News."
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