Digital currency Bitcoin hits new high before losing S$200 in value in one day

[holymage]

"Most people who aren't student of history find it hard to appreciate gold."

What if everyone in the future aren't students of history? What if Asteroid mining makes Gold worthless in the future?

IMO, both gold price and bitcoin price are only victims of supply and demand, nothing less, nothing more.

(not vested in Gold or Bitcoin)

To answer these questions of risk, we have to look possibilities. For example,

1) "What if everyone in the future aren't students of history?"
Is it possible that history will be abandoned in totality? I read somewhere that historically, most people's portfolio will typically have 5-10% weightage in gold. This is to provide a hedge due to the low correlation of gold against other asset classes. Today? It is close to zero portfolio allocation as gold doesn't provide any yield and "does nothing". Despite gold being misunderstood by today's general public, gold price increased from $250 in 2001 to $1260 in 2017 (peaked at $1900 in 2011). This is an annual return of 10%. Central banks still own tons of gold. Why do Central Banks do so when most countries' citizens trust their fiat currencies. Maybe, understanding how the US dollar obtained the status of the world's reserve currency is able to provide an explanation.

2) "What if Asteroid mining makes Gold worthless in the future?"
In fact, gold can be created from other elements using nuclear reactions by altering the atomic structure (protons) of an atom. But are asteroid mining and gold alchemy feasible? Will the cost of energy consumption justify the creation of gold? No. Simply because these are inefficient and expensive compared to current gold prices. There is a very low possibility in the next 50 years that creation of gold will be economically feasible. This is akin to saying "Why invest in stocks or properties when an Asteroid will befall upon earth and unlucky strike the assets you own". That being said, this is definitely one point to take note of as scarcity is a property of money.

Lastly, the value of most assets in this world is a function of supply and demand, nothing less, nothing more. 
The same goes for stocks, bonds, property, gold, cryptocurrencies, tulips etc.
For example, "Why share price of a company increase? Most likely because earnings increase and future dividends could possibly increase and so more people desire ownership of the company, and thus the share price will be impacted".