This is Why We Bitcoin

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by

Dr. Tyrone Moodley
in

Or… This is why we Hedge Bitcoin with Gold

Why Mixing in Gold Isn’t Just Old-School Hedging, It’s Strategic Insurance

Lately there’s been chatter: did Tether sell Bitcoin (BTC) and buy gold? On September 8, 2025, Paolo Ardoino, Tether’s CEO, shut down the rumour. He says they did not sell any Bitcoin, and will continue investing in “safe assets like Bitcoin, Gold, and Land.”

This seems like a small headline—but behind it lie some deeper reasons why Bitcoin holds its appeal, and why gold still sneaks into the conversation. Here’s the breakdown (the nerdy kind):

1. Bitcoin: The New Safe?

Bitcoin has a lot of the characteristics people longed for in traditional stores of value, with some new wrinkles:

  • Scarcity & Predictability: There will only ever be ~21 million BTC. Inflationary policy is built in (halving, capped supply). That’s very unlike fiat, where central banks can expand supply aggressively.
  • Decentralization: No single government or central bank controls Bitcoin. That gives it appeal as a hedge against political risk, hyperinflation, or erosion of trust in institutions.
  • Global, programmable, auditable: Bitcoin is digital by design. You can verify the ledger, hold your own keys, move across borders. These are properties gold struggles with (transport, storage, verification, etc.).

Because of all that, many see Bitcoin not just as an asset, but as modern insurance against systemic monetary risks.

2. Gold: The Time-Tested Hedge

Yet gold doesn’t disappear from the story. It’s ancient (for good reason) and still carries power as a hedge:

  • Historical store of value: Thousands of years of trust across civilizations.
  • Physical, peer-to-peer, non-counterparty risk: You can hold gold; it doesn’t depend on banks, smart contracts, or code (though storage & safety matter).
  • Diversifier: When many financial instruments move together (e.g. in a fiat crisis, or when interest rates spike or currencies collapse), gold often behaves differently. That helps soften portfolio shocks.

3. The Tether Rumour: What It Reveals

Why did the claim “Tether sold BTC and bought gold” even spread? And why did it trigger interest?

  • People are watching how big players allocate value across volatile assets. If a major issuer pivots away from Bitcoin toward gold, perhaps that signals loss of faith.
  • The data (quarterly BTC holdings) seemed to show a drop in Tether’s BTC balance and a rise in its gold exposure. On first look: map A → B, so “they sold A, bought B.” But as often in finance (and especially crypto), appearances can mislead.

Key refutations:

  • Tether’s CEO insists no sales of BTC were done.
  • Samson Mow (voice in the ecosystem) pointed out that some BTC transfers were to related projects (like Twenty One Capital), not sales. So net BTC exposure might even have increased.
  • Tether is increasing gold exposure: they invest in gold royalties firms, hold gold via their gold-backed stablecoin (XAUT), etc.

This shows two things: (a) how quickly data can be misread in the crypto-space, and (b) how even firms committed to Bitcoin see value in spreading risk.

4. Why Hedge Bitcoin with Gold

Given the above, here are some reasons (beyond “old habits”) for hedging BTC with gold:

Risk TypeHow Bitcoin Alone Might Fail / Be VulnerableWhat Gold Adds
Regulatory or policy shocksGovernments could impose heavy regulation, taxation, or crackdowns on crypto.Gold is decades-old in prestige; legal systems have a long history of recognizing it. More inertia, harder to ban.
Technical or security riskSmart contract failure (for tokens), custody hacks, software bugs.Physical asset, less dependent on code. Web of trust doesn’t need keys & networks.
Extreme inflation/hyperinflation of fiatBTC is volatile, but inflation erodes fiat; BTC might protect buying power.Gold historically held up well in classic inflation or monetary collapse scenarios.
Market sentiment crashesIf crypto loses narrative power or trust, its price might collapse.Gold often holds more stable value in panic or fear phases.

So hedging isn’t an admission of weakness; it’s acknowledging imperfect foresight. It’s like diversifying routes in case one bridge collapses.

5. Philosophical Angle: Belief, Trust, and Narratives

In financial reality, something is often as strong as the story behind it. Why do people believe in Bitcoin? Because they believe in decentralization, scarcity, neutrality. They tell that story to themselves and others.

Gold has its own narrative: permanence, solidity, universality. When you hedge, you’re embracing multiple narratives because no one story ever wins in all circumstances.

Tether’s statement (“investing profits into safe assets like Bitcoin, Gold, and Land”) reflects that plural belief: not putting all faith in just one ideal. That’s intellectual humility, a virtue in complex systems.

6. Forward-Looking: What to Watch

Since we’re thinking ahead, some places to keep eyes on:

  1. Regulation: If governments accept digital assets more, rules could still impose friction (tax, reporting, restrictions). How that affects BTC vs physical gold is very different.
  2. Infrastructure & security: Will custody, verification, insurance for digital vs physical continue improving?
  3. Macro inflation & monetary policy: If inflation keeps rising, or monetary policy becomes more aggressive, both gold and BTC might benefit—but the paths differ.
  4. Alternative safe-asset innovations: Stablecoins, real-world assets (RWAs), tokenized commodities, etc. Might blurr the lines between gold-like assets and digital ones.
  5. Narrative shift risk: Sentiment is fragile. If BTC is no longer seen as “digital gold” or loses some ideological appeal, people might rotate out. Gold’s cultural inertia might give it an edge in certain downturns.

Conclusion: Why We Bitcoin — and Why We Also Respect Gold

Bitcoin offers audacious promise: escape from centralized control, a hedge against monetary experiments, and a new kind of financial infrastructure. That’s why “we Bitcoin.”

But truth demands we build for adversity. Gold still has resilience, legitimacy, and a diversification value that Bitcoin, in all its exciting risk-rewards, doesn’t fully replicate. The Tether episode reminds us: big players don’t view assets in binary. They see shades of safety, trust, and optionality.

So maybe it’s better to frame it not as Bitcoin or Gold, but Bitcoin and Gold—each offering protection in different dimensions of risk.

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