You are right, cryptos don't need to be backed by precious metals, but their fascination is that they are currencies created outside govs and central banks.
A crypto backed by $ is a step toward more efficiency and security, but still it belongs to that legacy monetary systems which cryptos are challenging.
Since such a crypto's value is pegged to the $'s value, it can't be a store of value, at least as long as the $ is not a store of value
Backing by precious metals or fiat is similar legacy monetary system. The idea of backed currency goes way back.
However I said Bitcoin is genius because it is a store of scarcity value
so has any VBs cash out from cryptos?
would luv to know anyone that did that, success story!
When investors buy alternative assets, they typically look for two things.
First, they want to know how the asset will perform as a safe-haven asset during times of market volatility.
In this case, it should be clear that during the volatile month of October gold was a far superior safe-haven asset than was Bitcoin.
The second thing that investors usually want from an alternative asset is diversification.
That is to say, when they choose assets for a portfolio, they typically want to make sure that the returns on the different assets don't all move up and down in the same direction.
In other words, they want assets that are diversified. When one asset price zigs, the hope is that another asset price will zag.
Gold performed that function admirably during October. While stocks slid, gold rallied, albeit it a little. There was a zig for the zag.
That didn't happen with Bitcoin. While stocks zagged, so did Bitcoin.
Put simply, Bitcoin wouldn't have acted as a diversifier for a portfolio that had a significant weighting of stocks. As a result, there would be no risk reduction for such a portfolio, at least over the past month.
So far, at least, Bitcoin isn't really doing much of a job as an alternative asset when compared to gold.
This was an extract from
https://www.forbes.com/sites/simonconsta...58cc961660