Craig Wright, the Australian polymath who was put forward as the potential inventor of bitcoin, the crypto currency, is in the news again this week. Last week, it was reported that he was arrested by Australian tax authorities.
His arrest came less than 24 hours after several magazines speculated that he could be the infamous Satoshi Nakamoto, the pseudonym for the founder of bitcoin. The jury is still out on that one.
Buying gold with bitcoin
Meanwhile, the Australian reports that Wright tried to buy $85m-worth of gold, using bitcoin as payment, in 2013. It’s a bizarre old story. There is software, a gold mine, and court action involved.
But it would certainly be interesting if bitcoin’s founder (and as I said, the jury is still out on that one) was trading bitcoins for gold in May of 2013. The Aussie dollar gold price wasn’t particularly cheap at the time at around $1,358 per ounce.
But it was trundling along the lows. Also, since I was one of them at the time, I can tell you that buying gold in Australian dollars at the time was a way of anticipating/profiting from the decline of the Australian dollar.
In April of 2013, it would have cost you 105 US cents to buy an Aussie dollar. Then the commodities bust and the peak of the capex boom in Australia hit. The currency fell. It was just 89 US cents by early August, a 15% fall. It’s currently 72 US cents to buy an Aussie dollar.
But maybe this proves Charlie’s point at the roundtable. You own gold so your wealth disappears less fast in a crash. If you’re buying or trading bitcoin in 2016, it’s for the chance to make 2X, 3X or 10X your money. It’s not because bitcoin is gold.
By the way, Charlie’s five-part series on bitcoin has been edited into a digital monograph of sorts. That should be available tomorrow. I’ll show you how to get it then. Until then, pick up the podcast at 1:33:05 to hear Charlie and Dominic Frisby to talk about bitcoin and gold for 2016.
Category: Investing in Bitcoin