Summary
- Bitcoin's price broke the $100,000 milestone, followed by volatile trading, dropping toward $90,000 before recovering for a strong close.
- Despite Bitcoin and gold reaching nominal record highs, Bitcoin's total market cap is only about 1/9th of the estimated value of all gold ever mined globally.
- An estimated 20% of Bitcoin's current market cap, around $2 trillion, is considered lost due to inaccessible keys.
- Central banks have been buying gold in record volumes since 2022, with countries like Poland adding significant reserves.
- El Salvador remains the only government openly buying Bitcoin, with its holdings valued at roughly $600 million, while also claiming potential gold deposits worth $3 trillion.
- U.S. Senator Lummis advocates for a national Bitcoin reserve akin to the U.S.'s massive gold reserves, despite the U.S. already holding confiscated Bitcoin worth about $20 billion.
- Countries like Russia and China have vast untapped gold reserves, valued at $1 trillion and $1.25 trillion respectively, reflecting global gold's strategic importance.
- Gold prices in 2024 reached 39 record highs, with a spot price of $2,632/oz, while silver’s price remains below its historical highs, closing at $31/oz.
- COMEX announced smaller gold and silver futures contracts for retail investors starting in 2025, likely reflecting increasing demand for precious metals.
- In geopolitical news, South Korea briefly imposed martial law before it was revoked, amid escalating calls for President Yoon’s impeachment, while gold and silver markets globally remain heavily influenced by geopolitical and economic events.
Bitcoin bulls celebrated this week as the $100,000 per bitcoin price was finally broken... immediate price volatility followed shortly thereafter with a trade off wick falling toward $90,000 before recovery and a strong close today.
Even the fiat Fed Chairman had a highly shared take on that trade this week.
I'm not sure what Jerome Powell has been sniffing, but here are some facts to breathe in.
Even with both gold and bitcoin simultaneously near or at nominal record price level highs at the moment, Bitcoin's total market cap is only about 1/9th of the estimated global physical gold ever mined. Of which about 1/4th is sitting with government central banks declared and likely much more to come yet fully declared.
Estimates are also that about 1/5th of the near $2 trillion total current Bitcoin market cap keys have been already lost, meaning whoever owned them is unlikely to ever recoup them lost for good.
That is like world central banks collectively all forgetting where they put their official gold bullion reserves. That is but one example why direct comparisons between these two very different asset classes is a deceptive marketing clown show.
Since the USA confiscated Russia's $300 billion in US bonds in early 2022, government central banks on the net have been buying gold bullion reserves in record volume.
Poland for instance just declared adding another 21 metric tons so now 90 tons purchased this year to date.
But back to our fiat financialized clown world, where central banks currently buy record volumes of gold bullion while highly paid central bank chairmen tell audiences that bitcoin competes with gold.
Perhaps the only nation who has publicly bought bitcoin is El Salvador. This week President Nayib Bukele claimed that El Salvador has discovered up to $3 TRILLION in gold deposits in her soil.
BIG if TRUE. Total gold ever mined market cap is now about $19 trillion.
Especially if we consider the context that El Salvador's BitCoin savior has reportedly stacked 6,000 bitcoin to date. Really the only government to admit having actually bought bitcoin for sovereign reserves. A holding for El Salvador that is roughly $600 million in fiat US dollar value at the moment.
So essentially El Salvador is praying to mine gold from its ground valued currently at 5,000 times what its paltry bitcoin stack is currently worth. Now do you see how one thing is nowhere the other?
The world over will want to buy that alleged $3 trillion in El Salvador gold if it ever gets mined. Not sure about bitcoin though.
Onwards to other crazy headlines here in the USA, where for a few months now there has been relentless pumping by US Senator Lummis who publicly claims the US should build a Bitcoin reserve akin to the supposed world leading 8,133 Official Gold Reserve tonnage claim the nation still makes.
Former US Treasury head Larry Summers had a scorching take on the matter.
In terms of confiscated Bitcoin mostly from the Silk Road bust that the USA already reportedly has. The US has about 1 in 80 bitcoin mined, where the digital keys have yet to be lost.
That is about $20 billion in current value.
So basically just about 1 and 1/4 day's worth of current US Federal Government spending at the moment.
As for the nation's gold situation?
Candidate Trump had this interesting take in 2016 about who has the gold.
One place where the gold went was the Russian Federation who now has one of the cleanest balance sheets in the world holding a prudent allocation of gold both officially and steadily stacked since Donald Trump was telling reality TV actors they were fired.
Russia also has near some 11,000 metric tons of proven gold deposits in her frozen tundra. That is close to one trillion in gold yet mined.
China now claims to have over 15,000 metric tons of proven gold reserves yet mined, like $1.25 trillion in current value.
Late last week incoming President Donald Trump had the following to say about the BRICS.
So now the supposed free market capitalist leader of the world, the same country with by far the most tariffs in force, and likely further sanctions and future capital movement restrictions has resorted to shouting down and tweeting threats are supposed rivals.
Last time Donald Trump was in office the fiat US dollar spot gold price rose by +67%.
Given all this hot air bluster ongoing, this time around, it would not surprise me to see gold appreciate a lot more in his coming second term.
The spot prices of silver and gold were mixed on the week.
The spot silver price climbed and closed toward $31 oz bid while the spot gold price settled sideways at $2,632 oz bid.
The spot gold silver ratio fell on silver's relative strength to a still historically bloated level of 85.
The CME Group's COMEX gold futures market made news this week announcing that smaller leveraged retail trading plankton can at the start of next year 2025, come swim in their concentrated commercial bank shark infested waters.
Building off the success of their Micro gold and Micro silver futures contract push over the past few years.
This will all make more sense as the spot price of gold eventually goes manic and exponential up price walls. The old 100 oz gold futures contract will eventually give away to these smaller 10 oz and 1 oz gold futures contracts, and 1,000 oz Micro silver futures contracts.
By that time, this vanishing pile of unsecured gold supposedly backstopping the ongoing COMEX gold futures market will be a fraction of what it currently claims to be.
In crazy geopolitical news this week. For the first time in 35 years as a functioning democracy, South Korea imposed martial law for a few days only until 190 lawmakers pulled a late night session to revoke the martial law enactment. Calls for South Korea's President Yoon to be impeached have only intensified.
Marital law or not, silver will follow gold there as well.
Bloomberg had an interesting video piece revolving around why the gold price in fiat US dollars achieved 39 new record nominal price highs thus far in 2024.
We're gonna start with 1,000 oz silver bars able to be stacked on structures four stories high in Singapore. Later they will move onward to China and India both of whose markets are vastly larger and more dominant in the physical gold and silver world.
That will be all for our weekly SD Bullion Market Update.
And as always to you out there, take great care of yourselves and those you love.
While gold has broken records all year long, attaining 39 new record high closes, silver has yet to approach its previous bull market high of $50 an ounce.
In India the Silver ETFs now equal about 4% of annual retail silver investment flows. This compares to only about 5 percent for gold ETFs in the Indian market.
