Why Bitcoin is replacing gold

[00:02] ring, side by side, head to head. One of them has 5,000 years of history. The other has only 17. And I want to tell you why the 17-year-old is eating the 5,000-year-old's lunch. And why almost nobody on television is willing to lay

[00:17] it out plainly. Of course, I'm talking about gold versus Bitcoin. Let's go.

[00:29] Daily Wolf on Yahoo! Finance. I am your host, Scott Melker, also known as The Wolf of All Streets. Now, normally we spend 15 minutes diving into the news of the day, separating the signal from the noise. But every once in a while, I

[00:42] decide to do a deep dive into a single topic. And that's what we are going to do today. So, let's set the table. For 5,000 years, humanity has had one answer to the question of how to store wealth across time. One asset, gold.

[00:57] Through every empire, every war, every famine, every revolution, every currency collapse, gold has stood. It has outlasted Rome. It's outlasted Spain. It's outlasted the British Empire. It is, by an enormous margin, the most

[01:10] successful store of value in human history. So, today I want to talk about gold honestly, with respect, because I think the conversation that the crypto years has been a little smug and a little dismissive. And frankly, even a

[01:25] little disrespectful to a thing that has earned every ounce of the trust placed earned every ounce of the trust placed in it. Gold won for 5,000 years for very those reasons, you cannot really understand what is happening right now.

[01:40] So, let me walk you through it. Why did gold win? It is not magic. It's not tradition. It's its properties. Gold has, sitting inside it, a specific list of physical and economic properties that made it the best store of value humans

[01:53] had ever found. Let me list them because they truly matter. One, it is scarce. You cannot just go make more gold whenever you want. New supply has to be physically mined out of the earth, which is hard, slow, and expensive. Annual new

[02:08] gold production adds only about 1 and 1/2 to 2% to the existing stock. So, the supply is reliably constrained. Two, it's durable. Gold does not rust. It does not tarnish. It does not decay. A gold coin minted in ancient Egypt is

[02:23] still gold today. Almost every single ounce of gold ever mined in human history is still here somewhere in some form. The World Gold Council estimates roughly 220,000 metric tons of gold have been pulled out

[02:35] of the earth over 5,000 years of mining, and almost all of it still exists. And here's a fact that stops people cold. If you took every single ounce of gold ever mined in all of human history and melted it into a single cube, that cube would

[02:49] only be about 22 m on a side, roughly seven stories tall. That's it. 5,000 years of human effort chasing this metal to the ends of the earth, and the entire global stockpile fits inside a building that's smaller than most mid-rise

[03:03] apartment blocks in this country. Three, it's divisible. You can cut gold into ounces, grams, even gold leaf, whatever size you need. Four, it's fungible. 1 oz of pure gold is identical to any other ounce of pure gold. Universal,

[03:19] interchangeable. Five, it is verifiable. You can test gold's authenticity with chemistry. It has unique physical properties that are hard to counterfeit. Six, it's portable. Sort of. We'll come

[03:32] That combination of properties, scarce, durable, divisible, fungible, verifiable, and portable, is exactly what makes something work as money. simply the best thing that checked all those boxes. Nothing else came close.

[03:48] Silver was second, copper third, seashells, livestock, salt, all distant alternatives. Gold was the king, and it deserved to be. Anyone who tells you gold is a boomer rock or a useless yellow metal doesn't

[04:02] know what they're talking about. Gold won for 5,000 years because it deserved to win. End of story. Now, here's what changed. an agrarian economy, and then for an industrial economy. But, starting in the

[04:16] 20th century, the world started moving in a direction that exposed cracks in gold's armor. Cracks that did not matter in 1500. Cracks that did not even matter in 1900, but absolutely matter today. And once you see them, you cannot unsee

[04:30] Crack number one. Gold is not actually as portable as we like to pretend. Try moving a million dollars of gold across an international truck, an armed escort, customs declarations, insurance, and a serious

[04:43] chance of being stopped, robbed, or confiscated along the way. nightmare. At 100 million, it's effectively impossible without state-level infrastructure. Gold is portable in theory. In practice, in the

[04:56] modern global economy where capital moves at the speed of fiber optics, gold is functionally immobile. Crack number two. Gold is incredibly hard to verify at scale. When you buy a gold bar from a

[05:08] dealer, how do you actually know it is gold all the way through and not a tungsten core with a thin gold plating? You don't, unless you drill into it or do specialized testing. Central banks store enormous quantities of gold in

[05:20] schedules they choose by people they hire. Which brings me to a fact that genuinely should bother every American who cares about this. The United States is supposed to hold about 8,000 metric tons of gold, the largest national gold

[05:34] Reserve and Treasury say this gold sits in places like Fort Knox, West Point, and the New York Fed. You know when Fort Knox was last given a full, comprehensive, independent audit? 1953.

[05:48] 73 years ago. There was a partial review in 1974 where a small group of journalists and congress people were allowed a brief tour. Since then, the US government has refused every single time anyone has seriously asked to allow an

[06:02] Senators have asked, presidential candidates have asked, recently even billionaires with their own Department of Government Efficiency have asked. The answer is always the same. Trust us. It is there. Now, I'm not saying the gold

[06:16] I'm not making that argument. I'm making a different argument, which is that the very nature of physical gold sitting in vaults you cannot see, audited by people who answer to no one outside their own organization, means you have to trust

[06:29] them. There's no way to verify it yourself. None. You cannot, as a citizen, prove the gold is there. You cannot prove it has not been leased out, swapped, encumbered, double-counted, or quietly sold. You take it on faith. And

[06:43] in a world where every other institution has demonstrated, repeatedly, that faith has demonstrated, repeatedly, that faith in them is misplaced, that is a problem. Now, crack number three. Gold is seizable. And not theoretically.

[06:55] Actually, in 1933, in the middle of the Great Depression, President Franklin Roosevelt signed Executive Order 6102. That Executive Order made it illegal for Americans to own gold. Every American citizen was required by law to turn in

[07:10] their gold coins, gold bullion, and gold certificates to the Federal Reserve in the government set. The penalty for non-compliance, refusing to hand over your gold, was up to 10 years in federal prison and a $10,000 fine, which in

[07:25] million bucks. So, if you had done the responsible thing, and stored your family's wealth in physical gold for generations, the US government in 1933 walked up and took it by force of law.

[07:40] And then, the very next year, they revalued gold from around $21 an ounce to $35 an ounce, which is another way of saying they devalued the dollar by roughly 40% after they had already collected everyone's gold at the old

[07:53] lower price. Anyone who had handed over their gold was essentially robbed. And private gold ownership was not fully restored for American citizens until 1974. 41 years. So, when someone tells you

[08:06] gold is private, gold is yours, gold is safe, remember 1933. The single largest gold-owning population in the world had it confiscated by their own government today. Gold is portable until they make it

[08:19] illegal. Gold is private until they require you to register it. Gold is yours until they decide it is not. Crack number four. Gold no longer backs anything. The gold standard, the system that tied paper

[08:32] currency to a fixed amount of physical gold, was the foundation of the modern financial world for centuries. And on August 15th, 1971, in a hastily televised announcement, President Richard Nixon ended it. Cut the dollar's

[08:46] the dollar and every other major currency in the world that followed America's lead became pure paper backed by nothing but government promises. of money, the role it played for thousands of years, was unilaterally

[09:01] severed by one politician on one night in 1971. Gold did not fail. Gold was abandoned because the modern state could not run modern deficits while remaining honest about the value of its currency. And gold was the honest

[09:14] measuring stick that had to be broken to enable the lie. So, we entered the era we live in now. A world where the dollar is pure fiat, gold sits in vaults you cannot audit, and the entire global monetary system

[09:26] runs on the promises of central bankers. And in 2008, in the middle of a the world. Bitcoin. very carefully. Cuz the question is not whether Bitcoin

[09:40] is better than gold in some abstract sense. The question is, does Bitcoin have the same monetary properties that made gold the winner for 5,000 years, opened up in gold's armor in the modern era? And the answer to both questions,

[09:54] when you look at it honestly with respect for gold, is yes. Let me go through it. Scarcity. Gold is scarce, Bitcoin is more scarce. Gold supply grows by 1 and 1/2 to 2% a year through new mint

[10:06] mining. Bitcoin supply growth rate is now under 1% and dropping towards zero. And Bitcoin has a hard cap, only 21 million coins ever, that gold does not. New gold deposits keep getting found, new mining technology keeps getting

[10:19] infinite amount of gold sitting in the Earth's crust and on asteroids waiting to be reached. Bitcoin supply, by contrast, is mathematically locked forever. Durability. Gold lasts forever. Bitcoin,

[10:32] now 17 years and counting, on a network that has never had a successful attack on the protocol, is functionally indestructible. Let's call that a draw. Divisibility. Gold can be divided into grams realistically. Bitcoin can be

[10:45] divided into 1/100,000,000 of itself, a unit called a satoshi. Bitcoin wins. Fungibility. Both are highly fungible. We'll call it a draw. Verifiability. Here's where gold breaks. Gold has to be physically assayed. Bitcoin can be

[11:00] verified by any node on Earth in real time for free. Anyone, anywhere with a computer and an internet connection, can verify the entire supply of Bitcoin and confirm exactly how many exist and where. There's no Fort Knox in Bitcoin,

[11:12] The ledger is public. The audit is continuous. The trust is mathematical, not institutional. Bitcoin wins by a mile. Portability. Here's where gold collapses. You can carry a billion dollars of Bitcoin across any border in

[11:26] the world inside your head by memorizing 12 words. 12 words, that's it. You You anywhere on Earth, in minutes for a few dollars in fees, when without asking permission from any bank or government. Gold cannot do any of that, not even

[11:39] close. Bitcoin wins, and it wins so badly the comparison stops being fair. Gold can be seized, we proved that in 1933. Bitcoin held in self-custody key. Governments can ban it, they can criminalize trading in it, governments

[11:55] can do many things, but they cannot take Bitcoin out of a wallet they do not have the keys to. The asset itself, properly held, is the most resistant store of value to confiscation that has ever existed. Bitcoin wins.

[12:07] calmly, without disrespecting gold, you find this. Bitcoin has every monetary property that made gold the winner for 5,000 years, and in the properties where verifiability, portability, censorship

[12:20] it wins so decisively that the only remaining argument for gold is tradition, which is to say, gold has been doing this for longer. That's the only argument left, and it is a real argument. 5,000 years of track record

[12:33] takes time to build, and Bitcoin is still very early in that process. I'll to give you the number that ends the conversation. The total market value of all the gold ever mined in human history sits somewhere between 28 and 33

[12:47] Call it 30 trillion. That's gold's market cap. The total market value of sits between one and one and a half trillion dollars, depending on the day. Call it a little over a trillion. So, Bitcoin today is roughly 3 to 5% of

[13:01] gold's market value. Let's say 4%. Now, sit with what that means. If Bitcoin just matches it, doesn't beat it, doesn't surpass it, that's something between 20 and 30 times higher than where it trades today. Call it 25 times.

[13:15] For most of human history, silver was money, too, right alongside gold. Two value for thousands of years. And then slowly, generation by generation, gold's monetary premium. Silver didn't disappear, it is still scarce, still

[13:29] useful, still valuable, but it lost the throne. The newer, better store of value gradually absorbed the monetary value of the older, weaker one. That same process is now playing out between gold and Bitcoin. It will not happen overnight,

[13:41] happens and it's happening right now in real time in front of your eyes. I do they're being attacked here because they are not. If you own gold, you got the understood that storing your work in a depreciating fiat currency is a slow

[13:56] you chose the harder asset. You were ahead of 99% of the population and you still are. Good for you, genuinely. But the world has changed. The properties delivered by something else. The cracks that have opened up in gold's armor over

[14:11] end of the gold standard, the impossibility of moving wealth at independently verify reserves, are designed line by line to fix. Your dad isn't wrong about gold. He got the right

[14:24] solution available to you is a generation newer, mathematically better, what gold trades at. The transition will be quiet and it will not be without controversy, but monetary history is

[14:39] brutally consistent. The best store of value wins, eventually, always. So, I'll leave you with this. 5,000 years of gold, 17 years of 30 trillion versus a little over one. 4%. That's not a competition, that's an

[14:53] 4%. That's not a competition, that's an opportunity. I'll see you tomorrow.