Gold has been used as a hedge for portfolio diversification in many countries. For example, these 3 firms in Kerala – India seem to make gold in any form fungible. Over a period of time they seem to have amassed more of the yellow metal than some of the world’s richest countries in their reserves.
What makes this equally interesting is that since the past 2 years gold hast depreciated as an asset – globally.
Bitcoin on the other hand has significantly appreciated in value during the same period. However, with bitcoin, fungibility has been a concern due to very few people exchanging bitcoin for real money. The ATM’s charge an average of 20% commissions and the buy/sell ratio for Bitcoin is about 20%. Moreover, financial instruments such as loans on NPV for bitcoin haven’t yet made their mark.
But my guess is this will happen – sooner than later, since storage and transportation of bitcoin is much less expensive than Gold. The storage cost component of the transaction cost of holding Bitcoin is almost Zero, and this makes it very attractive.
Sooner, than later this will become an alternative if not powerful hedge against government backed currencies.
Look at the 2 graphs for these two forms of fungible currencies.