Bitcoin price has smashed all expectations, but even more so it has crushed almost all other commodities into dust in terms of raw ROI. Confusingly, however, gold is at the very bottom of the barrel.
Here’s how Bitcoin has decimated the once precious metal and hard money standard, but also a look at a comeback that could be brewing in gold.
Lumber, Oil, Gas: Top Commodities Catch Fire, But The Can’t Catch Crypto
Who says money doesn’t grow on trees? Trees themselves are big money right now, as lumber prices have outperformed both WTI and Brent crude, gas, corn, copper, soy, sugar, coffee, and countless other commodities.
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Although Bitcoin is regulated by the Commodity Futures Trading Commission, it is considered more virtual currency than commodities, even though it has a similar rarity and supply and demand dynamic. Therefore, the coin isn’t added to the list, otherwise it would be miles beyond anything else listed.
Commodity prices over last year…
Lumber: +265%
WTI Crude: +210%
Gasoline: +182%
Brent Crude +163%
Heating Oil: +107%
Corn: +84%
Copper: +83%
Soybeans: +72%
Silver: +65%
Sugar: +59%
Cotton: +54%
Platinum: +52%
Natural Gas: +43%
Palladium: +32%
Wheat: +19%
Coffee: +13%
Gold: +3%— Charlie Bilello (@charliebilello) April 20, 2021
Lumber prices have skyrocketed due to the booming housing market combined with a disrupted supply chain due to Covid. Contractors have ceased building new homes even though houses are selling well – solely because of material costs related to lumber, copper, and steel.
All commodities ebb and flow based on supply and demand, which makes the fact that gold is at the very bottom of the list rather notable.
Bitcoin Gives Beating To Gold Performance, But Revenge Could Be Near
Gold has only 3% to show for itself during a time when demand is king, and supply is limited. Anything with a scarce supply, from commodities to art and luxury goods – even whiskey – have increased in value significantly as the dollar drops. But why not the gold standard itself?
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The answer is clearly Bitcoin, and it has bled a large sum of capital from gold markets. The “demonization of metals” has come at the hands of the digital gold narrative, and its worked well for crypto.
Gold readies comeback against the cryptocurrency | Source: TVC-XAUBTC on TradingView.com
However, a trend change between the two inflation hedges could be coming. Gold could soon have some revenge against Bitcoin, while the cryptocurrency experiences a phase of volatility.
After a steep downtrend, gold is reversing against the top cryptocurrency. Reversals happen when sentiment is the strongest. Bear markets end when investors hate the asset – bull markets when investors are blinded by money.
Gold at 3% during a time when demand and supply matters, just doesn’t make sense, and should soon reverse source. And when it does, it could take some revenge against Bitcoin in the process.
Featured image from Pixabay, Charts from TradingView.com
