Nine months ago I made a call that copped a fair bit of criticism. I sold every bit of crypto I owned and put it into precious metals, mostly silver. At the time Bitcoin was sitting around $95,000 US and silver was about $50 an ounce. A lot of people told me I'd made a mistake.
Fast forward to now and silver has since run as high as $120 US an ounce before pulling back, while Bitcoin has actually gone backwards from where I sold it. I'm still up 30 to 40 percent on the swap. With Bitcoin's four year cycle pointing to a possible bottom next month, I'm getting asked the same question from two different crowds: the people who followed me into metals, and the people who didn't and now wish they had. Should I swap back into crypto, or keep buying precious metals?
My answer is precious metals, and in this video I walk through the three charts that led me there nine months ago, plus a fourth one I didn't have back then.
The Gold to Bitcoin Ratio Just Broke Down
The first chart I look at is the gold to Bitcoin ratio, which simply measures how many ounces of gold it takes to buy one Bitcoin. When the ratio is high, Bitcoin is expensive relative to gold. When it's low, Bitcoin is cheap relative to gold.
Nine months ago I flagged a huge breakdown forming on the long term chart. Since then, that ratio has dropped like a stone, and it looks set to keep falling. That's a real signal that gold is set to keep outperforming Bitcoin from here, not just a one-off wobble.
Silver's Breakout Against Bitcoin
Something I didn't highlight in my analysis nine months ago was the silver to Bitcoin ratio. Looking at it now, silver has broken out of a long term downtrend against Bitcoin, retested that breakout from above, and looks set to run from here.
Zoom out to the longer term chart of silver priced in Bitcoin and the upside potential is even clearer. This is exactly the kind of setup that tells me silver is positioned to significantly outperform Bitcoin over the years ahead.
Bitcoin's Four Year Cycle and the October Bottom Call
The second reason behind my original swap was Bitcoin's four year cycle, the well documented pattern where the crypto market runs up for roughly three years and then spends about a year working through a decline. Bitcoin peaked in October last year at around $128,000, which puts the one year mark right around next month.
So it's entirely possible Bitcoin puts in its cycle bottom in October and turns higher from there. I'm genuinely 50/50 on whether that plays out. If the pattern holds, it will. If US tech stocks roll over hard, I don't think it will.
Even if it does bottom and turn up, that's not enough on its own for me to buy back in. It's not just about an asset going up in dollar terms, it's about which asset is the fastest horse in the race. If I'm taking on the risk of an asset like Bitcoin, I want a return that's meaningfully higher than what I'd get from something safer like gold or silver, not lower.
Bitcoin's Broken Correlation with US Tech Stocks
The third reason from my original analysis was how closely the crypto market tracks US tech stocks. Since I made that first video, US tech has kept climbing while Bitcoin has gone the other way. The correlation the two used to share hasn't played out over the last year.
What hasn't changed is the underlying similarity. Both are higher risk assets that tend to thrive in low interest rate environments. With US tech looking stretched near the top of a bubble and US rates more likely to rise than fall from here, that's not a setup that has me bullish on either tech stocks or crypto.
Two Ways This Plays Out for Crypto Investors
Putting the ratio charts back together, silver outperforming crypto from here can really only mean one of two things. Either both assets rise together with silver just moving faster, or silver rises while crypto falls outright. The second scenario would be a genuinely rough one for crypto investors, where the four year cycle breaks down entirely, Bitcoin keeps sliding, and gold and silver keep climbing regardless.
This is not financial advice. This is insight into what I do with my own money, not a recommendation for what you should do with yours.
Michael Saylor, Bitcoin Las Vegas, and the Danger of Leverage
I've been around the crypto market long enough to have seen some genuinely reckless behaviour. I've watched influencers tell retirees to put 80 percent of their life savings into Bitcoin. I was in the crowd at Bitcoin Las Vegas last year watching Michael Saylor tell 20,000 people to go start a business and borrow as much money as they could to buy Bitcoin with it.
Saylor looked like a genius on the way up, and the crowd that day treated him like one. It looks very different now, with people who followed that advice facing genuine bankruptcy risk on debt they took on to buy an asset that's since fallen hard. Our approach at Liberty Bullion is the opposite of that playbook: hold the real thing, with no leverage and zero counterparty risk.
Why $300 Silver Is Just the Beginning
It's never sexy buying an asset at the start of a bull market. I had plenty of people telling me I'd made a mistake buying silver at $50 US an ounce, in the same way people scoffed at 10,000 Bitcoin buying a pizza before one Bitcoin was worth over $100,000 Australian. Performance is sexy, but the point is getting in before the performance happens, not after.
I've written before about why I expect silver to reach $300 USD an ounce within the next few years. If people think that number is exciting, I'd suggest the real reaction is still ahead of us, once silver starts being measured in purchasing power rather than just a dollar figure.
What a time to be alive.
Sam from Liberty Bullion.
