Is Bitcoin on the Verge of Breaking Out? Analyst Warns of Impending Disaster for Gold

Jeff Park, Head of Alpha Strategies at Bitwise Asset Management, has suggested that recent developments in the gold market could lead to a mass exodus to Bitcoin. The Bank of England has come under scrutiny for delays in physical gold delivery, sparking renewed debate on the trustworthiness of gold-backed assets. In response, Park expressed his thoughts via X:

“I’m anticipating a situation where a logistical mishap (or potential fraud) in the physical delivery of these assets disrupts the confidence of even the most ardent gold supporters, pushing them towards Bitcoin,” Park wrote via X.

Preference for Bitcoin Over Gold

Park’s statement follows reports that the Bank of England, known to hold approximately 5,000 metric tonnes of gold, has extended delivery times from a few days to a range of four to eight weeks. According to a source familiar with the issue, “The wait time to retrieve stored bullion from the Bank of England has increased from a few days to four to eight weeks,” indicating the central bank is facing challenges in meeting demand.

Market observers attribute these delays to a surge in transatlantic shipments and increased gold inventories in the United States. “Gold is not readily accessible due to a large shipment to New York and the rest stuck in the delivery queue,” a industry executive told reporters. The central bank’s backlog coincides with growing stockpiles on the Comex commodity exchange in New York, where gold inventory has risen nearly 75%—from 533 metric tonnes to 926 metric tonnes—since the US election in November.

Park also highlighted the industry’s past incidents of logistical and fraud issues, citing two significant scandals. He first mentioned the Qingdao Metal Scandal, recounting how traders in China used the same copper, aluminum, and nickel stockpiles as collateral multiple times, only to discover a portion of the actual metal missing.

Park then referenced the London Metal Exchange (LME) Nickel Fiasco, where the LME discovered missing nickel. Instead of bags of registered metals, bags of stones arrived. This was not the first fraud incident involving LME’s nickel.

Recently, Park pointed to reports of commodities giant Trafigura discovering a $500 million fuel shortfall in Mongolia. “I covered this earlier, but it’s worth mentioning that Trafigura lost $500 million worth of fuel in Mongolia three months ago,” Park noted.

Park argued that these incidents demonstrate the vulnerability of physical commodity markets. “You can transport the ‘physical’ fuel out of Mongolia,” Park emphasized, “but you can’t remove the spiritual fuel of Genghis Khan from Mongolia.”

Supporters of digital assets like Park claim that Bitcoin, often referred to as the ‘hardest’ asset on earth, avoids the logistical challenges faced by physical commodities. However, Bitcoin encounters its own obstacles regarding regulatory acceptance and ETF structures.

“Even as the hardest asset on Earth [Bitcoin] has minimal logistical costs, it still cannot be contributed directly to its own Bitcoin ETFs. Yet, let’s continue to pretend that this system is logical,” Park stated.

Park noted that current regulatory frameworks pose a hurdle: “One reason behind concerns about ‘regulation’ in crypto is the persistent application of a securities lens to an asset that doesn’t fit that framework. When viewed through a commodities lens from the outset, the world suddenly makes more sense.”

While the Bank of England has not issued an official statement on the delivery delays, observers see this as another potential turning point for traditional gold investors. Continued backlogs could lead to increased doubt about the reliability of physical gold markets. Park and others in the crypto industry view this as an opportunity to shift focus—and capital—towards Bitcoin, which does not rely on physical shipments or third-party vaults.

As of now, BTC is trading at $95,961.

Bitcoin price, 1-week chart | Source: BTCUSDT on TradingView.com

Featured image created with DALL.E, chart from TradingView.com

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