Meme Coins: The Ultimate Racket, Bitcoin a “Price” Speculation, Gold Enduring “Value”

“Meme Coins are the stuff of late-stage bubbles” -Captain Obvious

Disclaimer of bias: I have viewed Bitcoin and Crypto in general as a speculation to varying degrees from day 1. NFT? Well as soon as NFT/Crypto drones started liking, following and glad-handing me due to the NFTrh (@NFTRHgt) on what was thenTwitter simply because of three letters in the abbreviated name of my service (Notes From the Rabbit Hole), my Scam-O-Meter red-lined and broke. “Meme Coins”? Well, I told you my Scam-O-Meter broke so I’ll use my B/S Detector instead to take a look at the Crypto sphere vs. gold.

Crypto and especially its speculative outer edges are logical components of the massive array of investments and speculations alike that have been exponentially boosted by the decades-long bubble in monetary and fiscal policies designed to inflate asset prices at all costs. Fed and government, working the same angle from different sides of the street.

It is a bubble now indicated to be ending (if it’s not already blown) due to a ton of indicators we’ve tracked over the last year+ and in the case of the 30yr Treasury yield “Continuum”, since its big time trend break in 2022. Here is the not so pretty picture *, although details on this and other macro indicators are beyond the scope of this article.

* Unless you, like I, are a macro market nerd.

The general Crypto story that the public finds so engaging is actually quite compelling; technology and its unlimited power (unless someone trips over the plug), art/design and meme-centric creativity combine to theoretically set one free from the tyranny of the Central Banking system and the trampy debt notes of currency at its core.

Folks, the bubble is hitting its Zenith. It’s a play. Go ahead and play if you will. But understand that you are speculating, not investing (and you are not one of these 58 wallets).

Bubbles eventually burst, and the outer reaches of this one are going to simply vaporize, like the NFT scam did, while the likes of Bitcoin, when it is not being used to con the elderly out of their savings or to blackmail people with email threats of exposing the, err, personal things they do behind their screens, may have some utility. It has broken through to the mainstream corporate world in some cases.

But the sloganeering? Just hodl and get rich! That is the main pitch to newbie market players and it is a promotion for the ages. Crypto is figuratively sold to the public as currency outside the mainstream and outside the clutches of government. It is represented by its gurus (promoters) as safety and protection against government and monetary policy abuse. It is sold as monetary value of some kind, residing in server farms and organized by personal wallets and systems of transaction.

Well kids, good luck with that. Again, what happens when someone trips over the cord or worse, decides to turn out the lights? Not only is your speculation down the tubes, but the “value” that never was will be all too apparent.

I find the raging social media debates between Gold promoters and Bitcoin promoters to be especially comical. This battle of the Titans draws in all sorts of transfixed eyeballs from the multitudes who know there is something very wrong with the system that is/was. But just because both items are forms of monetary protest and revulsion, it does not mean they are even in the same universe, let alone ballpark.

• Bitcoin: Focusing on the most viable Crypto market, BTC is data. It resides within and is exchanged within electronic devices. There are rules. There are wallets. There are electronic safeguards to ensure that your “investment” in this “money” (a contradiction in terms that any experienced investor can spot a mile away) remains safely yours until you choose to trade or spend it. Simply not true. Your legal claims to this “money” are on a server that you do not own.
• Gold: If old time gold bugs do not even consider keeping metal in a bank safe deposit box, how can they even comprehend the idea of safe digital money on some remote server? The answer is, they can’t. I can’t. And you shouldn’t. You should understand BTC for what it is and understand gold for what it is.

Gold is a long-term marker and tracker of monetary value. It will spend years sometimes not doing what you may think it should be doing. Then, in a phase like today its price validates its promoters and their fans. The problem being, they should have felt validated no matter what the price was doing, because gold is simply an inverse reflection of the macro in which it exists. Thus, it is monetary insurance. Thus it has value.

The basis of this article is to define the difference between price speculation and value. Between a play and long-term insurance. Price-wise, BTC has drubbed gold since it began trading in 2014. The entirety of that phase (aside from a few brief and heavy corrections) was a bullish one in wider risk-on markets that were pumped by the then-ongoing policy bubble. So of course BTC has drubbed the counter-cyclical metal.

However, gold gets where it is going in the time it takes to get there. Many people are astounded at the big bull move that has blown through the 3000+ target that I personally had loaded since the Cup’s right side and Handle began to form in 2020. But it is not a bubble. It is an asset that was “counter” to bubble beneficiary assets from crypto to many hype-fueled stock sectors during the last cycle.

Today, gold, while extended on a nominal price chart, is just getting started and far from a bubble. This chart shows that gold has gone nowhere since 2021 vs. Bitcoin, and before that it only went down relative to BTC. So my points made above are not yet proven out in the relative prices. But again, price is price and value is value.

At some point the “value” aspect of gold is going to see its price start to rise vs. BTC, just as it has started (emphasis on “started”, as there’s a long way to go in this new macro) to rise vs. fellow policy-bubble recipient, the stock market (SPX).

Bottom Line

If you’re a player, understand you’re a player. You are playing Crypto along with armies of other players. You see those Meme coin wallet stats above? The 58 multi-millionaire wallets are not you. Are you the among the 764,00 losing wallets? Don’t want to be? Realize that the latest Crypto trends are easily manipulated in a tradition as old as the stock market itself. If you look around the room and you don’t know who the mark is, it is you.

If you are a holder of actual monetary value, you go long stretches (measured in years) on the outs. But if you see gold for what it is, those years are a breeze because value never goes away and insurance is always a good idea. This value gets marked down or up depending on the social/economic environment in which it exists. Right now, gold exists in an environment that his shifting counter-cyclical and post-bubble. It’s only just getting started.

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