ROSEN WEIGHS IN ON GOLD

In December 2021, the price of Bitcoin (BTC) tumbled from the high it had established only a few weeks earlier of $68,367 to $42,588, reflecting a 38% loss. Such volatility is typical for BTC, a feature of this so-called “store of value” that should give one pause when considering buying it for the long term.

My university training in finance and investments and career as a securities analyst and professional coin dealer gives me the confidence to believe other choices o er proven long-term value.

Recognizing and determining valuation is a result of my training. I can’t apply those same principles to analyzing Bitcoin and its ilk. I consider trading them as short-term speculation.

The owner of a website I follow, evidencebasedwealth.com, responded as follows to a reader who asked what his thoughts were on Bitcoin as a store of value.

“I’ve asked myself the same question for a couple of years now and haven’t made up my mind about it,” the owner replied. “On the one hand, there are many things I like about Bitcoin and its architecture. On the other, I have some lingering doubts about what I consider to be potential fatal flaws. The way I approach Bitcoin (philosophically) is to apply a baseball analogy once vocalized by Warren Bu ett. He said, ‘there are no called strikes in investing.’ What he meant is that a person can wait for the best pitches before taking a swing for the fences. For me, I’m willing to let this pitch go by. There are plenty of other proven stores of value out there that serve the purpose just fine. What Bitcoin o ers is a (potential) large increase in purchasing power. But that’s a property of a speculation, not a store of value.”

Gold’s 5,000-year history as a proven longterm store of value is one pitch I like.