Coinbase and ARK Invest tout Bitcoin as safer than Gold in new Bitcoin White Paper


ARK Invest analyst Chris Burniske, a leading blockchain and cryptocurrency expert recently wrote a bitcoin white paper explaining why Bitcoin is a safer investment than gold, among other topics. The full paper is also attached at the end of this post.

Key Highlights

Bitcoin is punching well above its weight:

  • Despite having only a fraction of the value, bitcoin’s average trailing daily liquidity as of May 6 is three times that of THE vanguard REIT ETF (VNQ) and nearly matched that of the SPDR Gold Shares ETF (GLD).
  • Around 7 million people hold a material amount of bitcoin while more than 500 million hold stocks directly or indirectly

Bitcoin’s trading volume is increasing faster than its transactional volume

Bitcoin is more of a safe haven than gold after correlation has gone from low positive to moderately negative, this suggests financial institutions are exchanging gold for bitcoin (at the margin)

  • Despite ever-increasing trade volumes, returns have consistently remained at a minimum correlation (-0.02) to other asset classes
  • Volatility has greatly reduced over the past year

Excerpt from Whitepaper

Bitcoin and its underlying blockchain technology have become a force of innovation since being introduced in the midst of the 2007-2008 Financial Crisis.1 e utility of the technology has driven the value of the currency that rides on top of it— bitcoin with a lower-case “b”— to grow by more than 1,000 fold in the last five years. This means a person who invested $1,000 in bitcoin at the start of 2011 would now be a millionaire. We believe that technical jargon, bad actors, price volatility, and sensational media have kept much of the masses away from what could be the biggest technological development since the Internet.

While this paper will not dive into the specics of the technology,3 ARK Invest and Coinbase encourage readers new to the subject to start with the originating white paper by Satoshi Nakamoto4 and follow it with Marc Andreesen’s article in the New York Times.

You can read the full paper here: BITCOIN: RINGING THE BELL FOR A NEW ASSET CLASS