In a corner cafe in London, 30-year-old Harry Bell is spending his lunch planning for the next, imminent financial crash. On a small black-and-silver Chromebook, he’s staring intently at charts while frantically typing on his phone. “Fucking idiot,” he mumbles, and then apologizes. “Sorry, not you,” he says, confessing that he’s spent the last day debating someone who “is still trying to [promote] Bitcoin.”
Bell is six-foot, lanky, with dark blond hair and wears a navy blue suit and bright pink shirt. His office — a mid-size hedge fund that specializes in private pension portfolios — is just around the corner, but he’s trying to be discreet. That’s because while his day job involves taking large amounts of his clients savings and investing them in tech companies, international construction projects and plots of land, he secretly thinks these investments are worthless, as in the next six months, a recession — one more severe than that of 2008 — will tank the global economy.
A better investment in his opinion?
Gold.
Bell is among a growing number of people who are advocating for a transition from standard currencies like the U.S. dollar, U.K. sterling or the Euro to precious metals. His argument is simple enough: Because gold is a physical commodity that can’t be manipulated or artificially increased or decreased, its value is more stable compared to other forms of currency. “The last recession showed the damage that debt has done,” he explains. “The next recession is going to be worse because since then, more countries have saddled up debt, and access to cheap money is still high because of low interest rates. It’s a recipe for chaos. Basically, nobody has learned anything in the past 10 years.”
Bell’s arguments have long been part of conservative and libertarian political philosophy that’s argued for governments to keep their currencies tied to a “stable level of gold,” and in so doing, drastically cut how much money is spent on infrastructure, health care and welfare. The gold standard, however, was abandoned by the U.S. and European central banks in order to fund World War II, a decision the vast majority of economists believe was necessary to defeat Hitler. As a result, activists who wanted to see a return to gold were mostly viewed as irrelevant (at least until 2012, when arch-libertarian congressman Ron Paul ran for president with a promise to severely constrain the power of the U.S. Federal Reserve).
All the while, gold advocates viewed their enemies as liberals who wanted government monies to fund social programs. But for younger gold guys (i.e., people like Bell), their new opponents — Bitcoin traders — ironically share the same vision of a free, self-regulating currency as they do. “I don’t have a problem, per se, with cryptocurrency traders,” Bell explains. Indeed, he even bought some cryptocurrency in 2013, when few people knew anything about Bitcoin, Litecoin and Ethereum. “I wouldn’t say that I was into all the hype around Bitcoin,” Bell says, laughing. “But I was optimistic about it and its potential, especially when all the banks and funds started becoming interested in cryptocurrencies.”
His optimism was short-lived, however: In 2018, cryptocurrency crashed, and the value of Bitcoin fell by nearly 80 percent and tens of thousands of investors lost their savings. “It wasn’t that I felt that normal currency was more stable or a better value,” he says. “On the contrary, what we’re going to see by the end of the year will be much worse. It was just further evidence that money created without any solid regulatory system, where the value of currency is dependent on how many people are putting their investment in, is always set to fail. It’s only with something like gold or precious metal that you’re going to get a stable currency.”
Reddit is brimming with similar arguments. The subreddit r/investing, for example, frequently hosts threads on how to invest in gold or buy stocks in gold-mining companies, suggesting that these are far better investments than cryptocurrencies. “The crypto dream is dead in the water,” redditor Mungojelly wrote earlier this year on the official Bitcoin subreddit. “It’s shown that it’s not going to be able to stabilize. If you have anything left, take it out [of your electronic wallet] and buy bullion.”
Meanwhile, YouTube, the platform many Bitcoin investors once used as a vital marketing/educational outlet, is fast becoming a place for former cryptocurrency proponents to now make the case for gold. “When you think about it properly, the principle of Bitcoin is shaky,” says Eli Emmanuel, a well-known personal finance YouTuber. In the video “Will Bitcoin Replace Gold?,” he advises, “One of the arguments that people make for Bitcoin, is that with gold you have to keep it locked in a safe, but with Bitcoin, it’s stored on a computer and a piece of paper. Where have I heard that before? I’ve heard that somewhere — a value, that’s [written on] a piece of paper.” Emmanuel continues his Bitcoin critique by noting its volatility, adding, “It wasn’t that long ago when we saw Bitcoin’s value going to zero. I’m not saying to not invest in Bitcoin, but it’s not true to say that it’s better than, or a digital equivalent, of gold.”
Not surprisingly then, cryptocurrency devotees have found themselves in a tricky position — defending crypto against a burgeoning swell of suspicion, distrust and gold guys. “Bitcoin has been able to show how it can bounce back,” argues Ivan on Tech, one of YouTube’s premier cryptocurrency personalities. “Bitcoin isn’t a better gold, or like gold, and the [cryptocurrency] community shouldn’t be having this debate about which is better because they’re not the same. What we’re seeing is that Bitcoin can, and is, returning to a stable state as [speculative] hype dies down.”
His fellow crypto YouTuber Brian Phobos adds, “We don’t know how much gold and precious metal there is out there; so it’s not a stable or finite currency. You don’t know if mining will be able to find a larger reserve that can tip the scale. With Bitcoin, at least we’re able to calculate how many coins are in circulation. That means it’s incorrect to say that it’s more unstable than gold.”
All of this, too, has moved far beyond the niche financial corners of the internet. Bloomberg’s Lionel Laurent suggests that large banks and funds that had once encouraged investors to diversify their portfolio — not just with Bitcoin but other forms of cryptocurrency as well — are back to suggesting that their clients put their money in stocks or government-backed bonds. “Demand for the digital currency ebbs and flows, largely driven by emotional factors like greed and fear,” adds Tim Culpan, another Bloomberg writer. “The value [of digital currency] is purely in the eye of the beholder as it’s still largely unused as a way of exchanging goods.” Though neither Culpan or Laurent recommend gold as a better alternative, articles like theirs have been used on precious-metals subreddits like r/coins as evidence that gold and silver are a safer way to protect one’s future.
Others, however, don’t see things in such divisive terms. “The main difference is gold guys yearn for the former glories of the gold standard, a time that they imagine things were more stable, while Bitcoiners think that vague notions like ‘cryptography’ give them a leg up in understanding markets,” explains Ben Munster, a reporter at Decrypt, who writes about cryptocurrency market trends. This means, he adds, “both gold guys and the people in crypto are on the yuppie, ‘Wall Street’ end of their currencies. They aren’t looking to systematically change society in ways other than rhetoric. The gold guys are Bitcoiners of another generation, and ultimately, they just want to prove to each other that their investment is the most valuable.”
Bell doesn’t necessarily disagree. After all, he wants to make sure he has savings when the recession hits. “Even a small amount [of gold] can be enough to put you a few steps ahead of everyone else,” he assures me. “You can use that to invest in land, to invest in utilities and everything else that’s going to be more important than anything the current financial system is offering.”
Before he leaves to return to work with a client who wants to invest in a new blockchain-based cloud network, I ask him whether people like him — that is, those who see salvation in gold — are as naïve as crypto traders. “Well, when everything collapses,” he says, looking at a small television behind the deli counter playing the news. “I’m pretty sure I won’t be panicking as much as you might.”
Hussein Kesvani
Hussein Kesvani is the UK and Europe editor of MEL and writes features on technology, subcultures and identity
