The G7 inadvertently takes sides in favor of bitcoin

Source: Adobe/andreyphoto63

The countries of the Group of 7 (G7) are inadvertently supporting the case of Bitcoin (BTC), as the shortcomings of gold are becoming more apparent, after a new move to ban imports of Russian gold.

Ban on Russian gold

The move to ban gold imports from Russia was announced by the US, UK, Japan and Canada during the G7 meeting that began Sunday in Germany. According to a statement from the UK government, the move will have "global reach, excluding the commodity from formal international markets".

Although analysts said the move was mostly symbolic, given that the London Bullion Market Association (LBMA) already in March removed Russian gold refineries from a list of accredited companies, it still shows that Bitcoin is a better asset on a global scale than gold.

According to Anthony Pompliano, a Bitcoin supporter and investor, the move to block Russian gold exports is just another step in a continued "currency arming."

"[...] this is another milestone in the decade-long trend of attempting to arm currencies by developed nations leading to degrading confidence in those same currencies," Pompliano wrote  in his newsletter on Monday.

Pompliano went on to quote Danny Diekroeger, a software engineer at Jack Dorsey's Cash App company, as saying the move could make physical gold much harder to put into practice in Western markets, potentially leading to a divergence in price between "paper gold" and the physical commodity.

"Even a bitcoin [maximalist] like me can see this potential shock coming to the gold markets and I can't resist riding the wave. I have physical gold coins safely in storage, hoping to sell them in exchange for bitcoin when panic strikes," Diekroeger said.

Pompliano added that if this scenario were to occur, bitcoin would probably also be part of history.

He also wrote: "If Danny's theory is successful, there will be ramifications on gold, bitcoin, and various fiat currencies."

Advertising for Bitcoin

Commenting on the situation on Reddit, several users pointed out that the ban on Russian gold actually works as advertising for Bitcoin, which within it is designed to resist censorship.

One user wrote: "It is as if the World Economic Forum is leading Russia towards bitcoin step by step," explaining that Western countries have "kicked Russia out of all fiat networks."

In addition, the user added: "Block gold at the border, but still let the oil flow", regarding the paradox of importing Russian energy despite having few traditional payment methods available to pay for it.

Others seemed to agree, with one user pointing out that the G7 ban is just another step towards arming the US dollar and other fiat currencies.

The user wrote: "First they freeze their reserves in USD, making it illegal to import gold."

The price of gold

As of Monday at 14:17 UTC, the price of gold has remained unchanged since the UK government published the announcement of the import ban on Sunday, trading at 1,826 USD per ounce.

Since the start of the war in Ukraine on February 24, gold has fallen by more than 4%, while BTC has fallen by 44%.

Bitcoin (blue line) and gold (orange line) since the beginning of the war in Ukraine:

Source: TradingView

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