Whether in the crypto ecosystem or the non-crypto ecosystem, a view that those with a firm belief in Bitcoin (including ourselves) have long held is:
Bitcoin is "digital gold".
I have never doubted this view.
However, in recent years, Bitcoin's increasing correlation with US stock trends and divergence from gold trends have made me start to doubt this perspective.
Because if Bitcoin were truly "digital gold" as we imagine, after all these years, with the community expanding so much and holders evolving from early niche geeks to increasingly mainstream institutional investors, its consensus should have become incredibly stronger, and people's belief in it should have become much more solid. Under such reinforcement, it should have increasingly behaved like gold.
But if we carefully recall Bitcoin's performance in recent years, we can see that it actually hasn't been behaving more and more like gold.
A typical characteristic of gold is that when the world becomes increasingly chaotic and people's confidence in fiat currency (especially the US dollar) or the existing financial system becomes increasingly fragile, people embrace gold and abandon fiat currency.
If we look back at not-too-distant history, we can see this effect of gold more clearly.
Before the Bretton Woods system collapsed, the world's currencies were pegged to the US dollar, and the US dollar was pegged to gold. And in the earlier Industrial Revolution period, the British pound and currencies of many capitalist developed countries were directly pegged to gold, which we know as the gold standard.
In those eras, the measurement of all value was ultimately done using gold.
If the Bretton Woods system and gold standard seem too unfamiliar, we can look at descriptions of the Nationalist Government's financial situation in its last two years on the mainland:
The excessive issuance of gold and silver notes completely destroyed the credibility of fiat currency, and people only used gold in large transactions. "Yellow fish" was the nickname for gold at that time.
In human history spanning 5,000 years, gold has played this role in the vast majority of times. In most periods, whether for nations or individuals, the ultimate form of measuring wealth was how much gold one owned.
Has Bitcoin's evolution and development reached this effect? Or are we increasingly recognizing that when people lose confidence in fiat currency and the existing financial system, they would embrace Bitcoin and measure their wealth in Bitcoin terms?
We might say so verbally, but what we say is often less honest than our actual actions.
If we own a Bitcoin worth $100,000 yesterday, but today its market price has dramatically dropped to $50,000, if we truly trusted Bitcoin or measured our wealth in Bitcoin terms, we should remain calm and indifferent.
But I believe 95% of holders would likely be devastated, regretting, "If only I had sold yesterday".
This actually demonstrates more trust in the US dollar and measuring wealth in dollar terms.
Let's imagine a historical scenario and consider what would happen if this occurred with gold:
On a day in 1948 in Shanghai, a "yellow fish" could exchange for 1 million gold yuan notes yesterday, but today it could only exchange for 500,000 gold yuan notes. Would Shanghai people frantically try to exchange their gold yuan notes for gold, or would they regret not selling the gold yesterday?
I think the answer is self-evident. Who would still trust gold yuan notes?
By comparison, we can more clearly see the difference between Bitcoin and gold.
Actually, in Bitcoin's early days, those idealistic geeks were more likely to believe in Bitcoin and more willing to measure their crypto assets in Bitcoin terms. Instead, as crypto assets have developed to the present, with more and more masses and institutions entering this ecosystem, more holders now trust US dollar stablecoins and are more willing to measure their crypto assets in US dollars (stablecoins).
Of course, we often see people claiming how many Bitcoins they hold, but in my view, this doesn't mean they trust Bitcoin more or measure their assets in Bitcoin. Instead, they believe more in Bitcoin's dollar value after exchange and care more about how many dollars their Bitcoin is worth. Here, Bitcoin is a wealth target, similar to real estate.
Gold took 5,000 years to establish its financial and monetary attributes in history and people's hearts, but Bitcoin lacks such history.
Without the tempering and grinding of history, Bitcoin can hardly be said to be like gold at this point.
There's another view that Bitcoin is a hedge against the real world.
But if we carefully review Bitcoin's performance during real-world crises in recent years, we'll find that while in early years some people used Bitcoin as a hedge (like during the Cyprus financial crisis), as time progresses, when people lose confidence in the real world (such as during stock market crashes), more people and institutions seem to convert Bitcoin to stablecoins or directly to US dollars to mitigate current risks, rather than buying more Bitcoin as a hedge.
Such behavior doesn't look like hedging against real-world crises in any way.
So what are Bitcoin's attributes?
I think it's more like a special collectible in the digital age, a collectible imbued with special meaning.
It's not like gold, and calling it a "value store" seems far-fetched.
Qi Baishi's paintings are limited, valuable, and expensive, but we call them collectibles, not "XX gold", and we rarely call them "value stores".
For those paintings, we know:
When the economy is booming and wealthy people are willing to spend lavishly, their prices will soar.
But when the economy is sluggish and wealthy people start calculating, their prices will decline.
"Collecting in prosperous times, gold in chaotic times" - those paintings are collectibles in prosperous times.
In this aspect, Bitcoin is quite similar:
When the US stock market is booming and institutions are willing to spend lavishly, Bitcoin's price will soar.
When the US stock market is sluggish and institutions start calculating, Bitcoin's price will decline.
Bitcoin's correlation with the US stock market (economy) is more like the correlation between collectibles and the economy.
So Bitcoin is more like a collectible in some ways, a collectible with value imbued with additional meaning. Although it cannot be appreciated, its history, special technology, and the historical context of its birth give it characteristics that other collectibles do not have.
If this is the case, its future trend will likely strongly depend on the performance of the US stock market (US economy) or the development of the crypto ecosystem, and it is unlikely to play a risk-hedging role like gold.
