Dear Reader,
Today I want to talk to you about Gold vs. Bitcoin.
A good buddy of mine is in the hospital — he's doing okay — and we got to talking over the weekend.
He's a big Bitcoin guy.
He said, "Dylan, what do you think about this new Bernstein report? They say Bitcoin could hit $300,000 because of the debasement trade."
And I told him what I'm going to tell you now.
The Debasement Trade Is Real
The debasement trade is something we talk about here a lot.
It's the belief that the US dollar is going to keep losing value, that inflation is going to keep getting worse, and that the most important question you can ask right now is: what do you do to protect your wealth?
One thing you do not want is long bonds.
You never want a fixed payment every year when you're dealing with variable interest rates and variable inflation.
You get frozen.
And frankly — and I want to be direct about this — there is a lot of manipulation happening in the bond market right now.
Treasury Secretary Bessent himself has admitted he's trying to boost buying on the long end of the curve to keep interest rates artificially suppressed.
Stanley Druckenmiller called this out in a big Wall Street Journal op-ed last week.
He said they're wrong, that the government needs to let the market set interest rates.
He's right.
The Trump administration is manipulating interest rates.
Anybody who tells you otherwise isn't paying attention.
Bitcoin vs. Gold
So my buddy asked me: given all of this, which would you rather own — Bitcoin or gold?
First thing I said was: those aren't your only two options.
Neither of them is the best answer to the debasement trade.
But gun to my head, I'm choosing gold.
The reason is simple.
Central banks are buying between 50 and 100 tons of gold every month.
They are not buying Bitcoin at anywhere near that scale.
Anyone who tells you otherwise is giving you fake news.
Yes, there was some talk when Trump first took office about establishing a Bitcoin reserve.
That has not happened.
Central bank buying power is real, it is institutional, and it will keep pushing gold higher.
My buddy pushed back.
He said: what about Bitcoin's finite supply? What about the halving?
And I said: gold is also finite.
It's a rare material.
The Earth isn't making more of it.
So that argument doesn't really separate the two.
What separates them is who is buying.
And right now, the most conservative, most powerful money on the planet is buying gold.
Not Bitcoin.
The Bigger Point
But here's what I really want you to take away.
Bitcoin and gold are not your only options in an inflationary environment.
During times of inflation, what you want is assets that can raise their prices to at least match — or better yet, exceed — the inflation rate.
Real estate does this.
You own property, rents go up with inflation.
You're covered.
Stocks can do this too.
Most good companies raise their prices roughly in line with inflation every year.
But some companies are truly special.
They can raise their prices above the inflation rate.
I always use Hershey's as my example because I love eating Hershey's.
Let's say Hershey's faces 3% inflation on their input costs — cocoa, sugar, everything that goes into making a bar.
Most companies would pass that 3% on to customers and call it a day.
But Hershey's has such a powerful brand, such a loyal customer base, that they can raise prices 5%.
They don't just cover the inflation.
They make money from it.
That is pricing power.
Very, very few companies have it.
Very, very few assets in the world have it.
And finding those companies — businesses that can raise prices above the inflation rate — is what I call the 1970s playbook.
I was trained on that playbook coming up on Wall Street.
We've had such a non-inflationary environment for the past 35 years that most investors have never had to think about it.
Now they do.
I've dusted it off.
And I'm going through it carefully for you.
The Bottom Line on Bitcoin vs. Gold
If I had to choose one, I'm choosing gold.
Central banks are buying enormous amounts of it every month.
And Bitcoin has another problem most people don't talk about.
Every time it gets to a certain level, Wall Street's financial engineering kicks in — all the leveraged products, the derivatives, the institutional products built around it.
And when those structures get hurt, they put enormous pressure on the price.
We'll see if Bitcoin can ever break out of that trap.
In the meantime, real assets with real pricing power are where I'm focused.
And look — if central banks are buying 96 tons of gold every month, the question isn't whether to own gold.
It's how to own it.
Physical gold protects your wealth.
But the miners — the companies sitting on gold still in the ground — those are the ones that move exponentially more than gold itself when the price increases.
And I just found one that I think captures more upside than anything else in this space right now.
Have a wonderful Monday.
I'll see you tomorrow.
“The Buck Stops Here,”
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Written by Dylan Jovine