Exploding Gold Sales at Pawn Shops Offers a Lesson for Bitcoin Bulls – CoinDesk

Exploding Gold Sales at Pawn Shops Offers a Lesson for Bitcoin Bulls – CoinDesk

There are many reasons to be bullish on gold, but the persistent problem with the precious metal is that it is never truly consumed. Every ounce of gold mined since the dawn of time is still there.

For example, Bloomberg reported this weekend a flood of customers rushing into a Brooklyn pawn shop with their valuables to take advantage of the recent rise in gold which reached a record price above $2,400 per ounce. “People are using gold like a vending machine they never had,” owner Gene Furman, who has seen seller traffic three times normal since the metal’s rally began, told Bloomberg two months ago.

Buyers also appear to have struck at these prices, with the U.S. Mint reporting American Eagle gold coin sales in March that were about 10% of the level a year earlier.

There are obvious differences between gold and bitcoin (BTC), but they share many similar properties. Among them, bitcoin is never truly consumed and everything mined is still with us (although some may be unavailable due to loss of private keys).

Mainly driven by increased demand from spot ETFs, bitcoin as of mid-March was up nearly 70% for 2024 to hit a new all-time high above $73,000. The rally has since stalled, with the price now more than 15% below that all-time high. The reasons for this decline are up for debate, but over the past month, sellers have outpaced the slightly slowed but still brisk pace of ETF buying.

While the bulls like to point out that only 900 bitcoins are mined per day (and with the bitcoin halving this week, that number will be reduced to 450 per day) compared to ETF demand which often runs into the thousands per day. day, the calculation does not necessarily lead to “the number is increasing.” The circulating supply of Bitcoin stands at nearly 20 million, and at a high enough price, many willing sellers are just as happy to cash out as those rushing to Gene Furman’s pawn shop.

Just yesterday, in fact, an early crypto enthusiast transferred 50 bitcoins mined in 2010, worth $3 million at current prices, to the crypto exchange Coinbase, presumably with the intention of selling them. This follows the December move of a 13-year-dormant address of more than 1,000 bitcoins worth $40 million to a trading desk.

The final word on gold and possibly bitcoin goes to Tobina Kahn, president of House of Kahn Estate Jewelers. “It’s very busy and we’re getting more calls than ever about customers wanting to bring their jewelry,” she told Bloomberg. “I tell customers to bring them in now because we are at unprecedented levels.”


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