Bitcoin Surges 100% to $118,000, Outperforming Gold as Hedge

Bitcoin has been gaining traction in the ongoing debate between gold and cryptocurrency enthusiasts. Debra Robinson, a gold maximalist, expressed skepticism about Bitcoin, referring to it as a "set of man-made numbers" and questioning the value of paying $118,000 for it. In response, Lyn Alden, a respected macro analyst and Bitcoin advocate, suggested that precious metal enthusiasts allocate 5% of their metals position to Bitcoin. This strategy, Alden argued, would hedge against the risk of Bitcoin gradually taking market share from gold, allowing investors to "go to the beach and forget about the asset forever."

As of the time of writing, Bitcoin was trading at just under $118,000, having recently hit new all-time highs. This reflects global economic uncertainty and inflation concerns. Bitcoin's market capitalization now exceeds $2.2 trillion, making it one of the world’s most valuable assets and surpassing silver. Additionally, 100 public companies, including BlackRock and Strategy, collectively hold nearly 1.3 million BTC, about 6% of the total supply. Gold, meanwhile, has also performed well, trading close to its record high of just over $3,500 at $3,355 an ounce. Alden's suggestion is not about abandoning gold but about risk management. For a gold holder with $100,000 in metals, a $5,000 position in Bitcoin acts as a hedge against the risk that Bitcoin continues to eat into gold’s traditional role as a store of value. This small allocation to Bitcoin can provide upside exposure if Bitcoin continues to outperform; even a modest position can have a significant impact on total portfolio returns. If Bitcoin fails, as many gold maximalists believe it will, the loss is limited to a small fraction of the overall portfolio.

Vijay Boyapati, author of The Bullish Case for Bitcoin, offered a historical perspective. He commented, “I was recommending this in 2013. At that time, I viewed Bitcoin as insurance against gold. Now I view gold as insurance against Bitcoin.” Boyapati’s comment reflects the dramatic shift in Bitcoin’s perceived risk profile over the last decade. What was once a speculative hedge for gold bugs has, for many, become the main event, with gold now playing the supporting role. Not everyone is convinced, however. Peter Schiff, a notorious Bitcoin skeptic, recently urged investors to sell BTC and buy silver, arguing that “Bitcoin remains a risky bet, while silver offers more upside and minimal downside.” Yet, as corporate and institutional adoption of Bitcoin accelerates, Schiff’s warnings increasingly fall on deaf ears. Allocating even a small percentage of a metals portfolio to Bitcoin is a rational hedge against being blindsided by technological change, and as Boyapati stated, the logic of hedging with Bitcoin has only grown stronger as adoption, liquidity, and institutional interest have surged. Gold maximalists may scoff at the idea of paying six figures for man-made numbers, but the numbers don’t lie: Bitcoin’s rise is reshaping the store-of-value landscape. As Lyn Alden and Vijay Boyapati suggest, a modest Bitcoin allocation is not just speculation, it’s prudent risk management in a rapidly evolving world.