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If You Want to Be Short Bitcoin, Be Long Gold

Jared Dillian is a former Wall Street trader and the editor of Mauldin Economics’ investment advisories Street Freak and The Daily Dirtnap, a newsletter for sophisticated investors that is published about 225 days per year.

Like us here at the Hard Assets Alliance, Jared believes cryptocurrencies could one day be successful, but is skeptical about the raging bitcoin bull stampeding through today’s investment landscape.

Here’s a snippet from The Daily Dirtnap issue of Jan. 4, 2018, that we thought you may find entertaining and enlightening. Enjoy!

I am a bit of a gold bug, always have been.

What I think is interesting is that the gold bugs have mostly moved on from being gold bugs and are now bitcoin bugs. A prominent analyst who is big on bitcoin followed me on Twitter for a while, but gave up, probably after he figured out I was a bitcoin bear. You would be surprised at the number of people that were once gold bugs that have moved onto being bitbugs.

So I know we have explored this before, but what do you think happens to gold if bitcoin drops to $1,000?

A. Up $50
B. Up $200
C. Up $500


Source: Bloomberg

I say the answer is B.

I have said this before—if you want to be short bitcoin, be long gold.

Gold has a habit of disappointing people after it goes for a little run, but maybe this time is different?

If I were to ask you how many gold Eagles the U.S. Mint sold last year, what would you say?

About 300,000 ounces.

What do you think the ATH [all-time high] is?

1.4 million ounces.

As it turns out, the last time we had such a giant drop in gold coin sales was… right before the financial crisis.

Hey, just another tidbit for you. I feel like I am underinvested but I probably am not. I probably have enough.

I will say this. People will get bullish on gold again, and everyone will be surprised when it happens. Now, of course, in order for people to get bullish on gold, you need the exacta box of 1) bitcoin crashing and 2) stocks crashing. Could happen.

Speaking of exacta box, it’s been a loooooong time since I’ve watched the ponies. Never had more fun flushing money down the toilet than at Monmouth Park.

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