Investors choose Bitcoin over gold?

Imagine someone gives you $10,000 on the condition that you can't do anything with it for ten years. Would you choose cash, government bonds, gold or bitcoin? Exactly that question Explained former U.S. Congressman Ron Paul to his more than 650,000 followers on Twitter. And guess what: Of all 70,513 people who answered this question, more people currently preferred bitcoin (54%) than gold (36%).

It is no surprise that only two percent would prefer to keep this amount in cash, because inflation does not make this an interesting option. But the fact that so many people would rather put away Bitcoins than physical gold for ten years was a striking outcome. Kitco's Daniela Cambone reached out to Ron Paul for further clarification.

Were you surprised by this outcome?

Yes, a little. Of course, I was not surprised that only two per cent chose to hide the money away in the form of banknotes, which is good. People no longer have much confidence in the banknotes of the Federal Reserve and they also believe that it is better not to buy government bonds anymore. But there was a battle between gold and bitcoins. That was information for me, because it shows where my followers are and what they think.

Most people who know me know how strongly I am in favor of gold and that I am tolerant of alternative forms of money and competition in money. But I am surprised that so many people would put bitcoins away. This is a reflection of the inflation we are seeing today. Of course, bitcoin is very exciting and the price is rising, but they don't have a long-term perspective of where bitcoin will be in ten years. No one knows, but we have a pretty good idea of where gold will be in general. Gold has been around for a long time and won't go away either.

As you point out, most of your followers have an affinity for gold, so the outcome is a bit surprising. Is that perhaps also the reason why gold is lagging behind and that investors are opting for bitcoin instead of gold?

I do not know exactly whether that is the case, but the general mood is. But it's not that gold is in bad shape either, because when the gold price was at $1,050 in January this year, it was a pretty good start for a new cycle. And I've seen a cycle like this twice before, one in 1971, when it went from $35 to $700, and then also a move from $270 to $1,800. Then came that correction. So we may be in a phase where gold will rise again, the only question is when. But I don't think it's so much a question of whether people choose bitcoin or gold, but that it's more a question of inflation. The Fed has created so much money and there is so much speculation that they are also choosing this option.

But you're not going to get into bitcoin?

I haven't been tempted, but I find it fascinating. My position is what I would personally do as an investor. What I'm doing in politics is legalizing competition. Real money started on the free market, without the government. And there they always chose gold or silver or something else with tangible value. And I think that's going to happen again, but to change sentiment quickly now that we've lived in a central banking world for so long, that's quite a change. But if you look at Zimbabwe or Venezuela, you can see that change can happen very quickly if there are big problems.

The stock market is heading towards new all-time highs, but you've revised your previous forecast of a 25% correction in the stock market to a possible 50% correction. Where does this conviction come from and when will this correction come?

The valuation in the stock market seems so artificial. The price/earnings ratio is out of control and the debt position is very poor. I have no faith in governments and in saving the economy with a new tax program that we don't yet know what it will do. I have so little faith in the government in Washington and the Federal Reserve keeps printing money, so I think the market is overvalued. But I don't trade the stock market, and I don't want to tell people what to do.