Bitcoin Setup 'Exact Same' Like Gold's 1657% Explosion During 1970s, Says Seasoned Trader, But Critics Have Something To Add
Seasoned cryptocurrency investor Fred Krueger on Monday drew a historical parallel between the 1970s gold price surge and the projected trajectory of Bitcoin (CRYPTO: BTC) over the next decade.
What happened: In an X post, Kruger posted a chart showing the average annual growth of gold prices in the 1970s, beginning at $35 per ounce and rising to $615 by 1980, marking a whopping 1657.14% increase.
Krueger argued that Bitcoin could follow an “exact same” pattern in the next decade, driven by what he deemed as a desire to exit the traditional financial system
"In both cases we went from “everything is amazing” to “everything is crap” in a decade," he added. "Perfect analogy."
See Also: From Warren Buffett’s Berkshire Hathaway To Jeff Bezos’ Amazon — Bitcoin Is Now Outshining These Wall Street Titans
Notably, the U.S. GDP growth rate averaged around 3% during the 1970s, lower than the average growth rate of over 4% in the previous two decades, according to Trading Economics.
The period also saw high inflation due to the 1973 oil embargo on the U.S. by the Arab members of the Organization of the Petroleum Exporting Countries.
Kruger cited this as one of the elements influencing the appeal of gold, along with factors like high interest rates and geopolitical problems like Russia’s invasion of Afghanistan.
Why It Matters: Kruger’s prediction that Bitcoin would replicate the gold boom of the 1970s was contested by some X users.
A user, MorningAlpha.ai, said that the consumer inflation, which peaked at 13% in 1980, had a "huge influence" on gold's price back then. The Consumer Price Index for April, meanwhile, came in at 2.3%.
Additionally, a section of users cited potential risks like quantum computing, which could theoretically break Bitcoin's cryptography in the future.
Photo Courtesy: Yalcin Sonat on Shutterstock.com
Price Action: At the time of writing, BTC was exchanging hands at $108,946.71, up 0.61% in the last 24 hours, according to data from Benzinga Pro. Spot gold traded at $3,340.51 per ounce as of this writing, down 0.05%.
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