Gold Vs Bitcoin Part 3
Gold Is in a Bubble. That Doesn’t Make It Worthless.
On January 26th I looked at the gold charts and couldn’t believe my eyes.
Gold and silver was in a bubble.
I knew immediately I needed to write about it. Years in crypto train you to recognize bubbles quickly. Once you’ve seen enough of them, the patterns become obvious.
Then life happened. Other posts were already scheduled, so this one didn’t go out when I wanted it to. I’m late.
Before going further, I need to be clear about something. I love gold. I really do.
So when I say gold was in a bubble, don’t hear a “Crypto bro” taking shots at gold because Bitcoin hasn’t taken over the world yet. That’s not what this is. When the gold bubble finishes unwinding, I plan to buy gold myself.
Now let’s look at the charts.
Here is gold’s chart I saw on January 27th. 1
Here is silver on January 27th. 2
And finally, here’s what those charts immediately reminded me of: Bitcoin in December 2017. 3
Ignore the assets.
Ignore the timeframe.
Ignore the prices.
Just look at the shape.
There’s no difference.
Yes, gold and silver are fundamentally different assets than Bitcoin. That’s not the point. All I am pointing to is the bubble. And bubbles reveal crowd psychology and nothing about the underlying asset itself. 4
A house is still useful even if it’s 2007.
Gold and silver are still important as long-term stores of value and industrial metals.
The tech bubble burst in 2000. That didn’t make the internet irrelevant.
So if it has nothing to do with the underlying asset what causes these crazy bubbles?
Human psychology.
Here’s the speculative bubble cycle popularized by economist Jean-Paul Rodrigue. 5
Something changed. In gold’s case, one major trigger was the U.S. cutting Russia off from the financial system. That sent a message to other countries: your reserves may not be safe. Nations like China responded by reducing bond exposure and buying gold instead. 6
Smart people notice. People closest to the metals market see what’s happening and start positioning early.
Awareness. Gold rises steadily. Maybe 10% in a year. Financial media starts paying attention. The conversation stays mostly inside finance circles.
Mania. Numbers go up. Your Uber driver is now a gold expert. The stupidest person you know is buying silver.
Fear. The first real dip hits. Some people expect a quick recovery. There are usually bounces here.
Panic. Everyone wants out. The price dumps.
Nausea. There are winners, but many more losers. Six months later, you’ll meet people who never want to hear the word “gold” again.
Aftermath. This is the part that matters.
The asset either disappears or it still solves problems. If it solves real world problems, it will rebuild and stabilize. Bitcoin did it. Tech stocks did it. Gold will do it too.
I’m writing this on February 3rd, though it won’t be published until February 15th. By then, we may already be deeper into the fear or panic phase.
Here is the current weekly gold chart.
The first bad dip happened on February 2nd. I could be wrong about where we are in the cycle. This could still be a pause before another leg higher. I’ve seen that happen many times in crypto.
Either way, gold is in a bubble.
And it will pop!
But here’s the part people miss.
Once the pop is over, and everyone is miserable, that’s when the real opportunity shows up. You may get the chance to buy an asset that has held value since ancient Egypt at a discount.
I wonder if this could apply to anything else?
Bubbles show up in nature and they show up in human nature as well. But just because a bubble pops doesn’t mean there was nothing there.
Final Word
What stage of the gold bubble do you think we are in?
“The time to buy is when there’s blood in the streets, even if the blood is your own.”
―Baron Rothschild
Disclaimer:
The information in this publication is for educational purposes only and does not constitute financial, investment, or legal advice. Always do your own research before making any financial decisions. Cryptocurrency investments carry risk, and past performance is not indicative of future results. I actively invest and trade in the crypto markets, and my personal portfolio and holdings change frequently. Nothing I share should be interpreted as a guarantee of performance or a recommendation to buy or sell any asset.
https://www.jmbullion.com/charts/gold-price/
https://www.jmbullion.com/charts/silver-prices/
https://www.jmbullion.com/charts/bitcoin-price/
https://www.oaktreecapital.com/insights/memo/on-bubble-watch
https://transportgeography.org/contents/chapter3/transportation-and-economic-development/bubble-stages/
https://neweasterneurope.eu/2026/02/02/gold-in-the-age-of-sanctions-how-the-russia-ukraine-war-reshaped-the-global-bullion-market/#:~:text=Historically%2C%20gold%20has%20rallied%20during,future%20sanctions%20or%20dollar%20volatility.