The number of circulating Bitcoin in existence has always been made exclusive. While this in itself may not seem particularly useful, it is significant for tracking the asset’s overall value. This is an extension of Bitcoin’s most fundamental quality; transparency. However, the same cannot be said for Gold. The digital asset which is Bitcoin’s topmost rival in the race for value is guaranteed to register a decline in annual returns as new reports claim that 22% of the annual gold produced in China was fake.
China’s leading gold manufacturer tangled up in counterfeit gold production
As reported by ZyCrypto, China, the world’s leading producer of Gold is involved in what is termed “the biggest gold counterfeiting scandal in recent history.” In fact, more than 4% of the country’s hold reserve is suspected to be fake. According to ZeroHedge, the fake gold was produced in Wuhan, a city that is famous for the production of many fake metals in the country.
The root of the event was traced back to 2015 when the largest privately held processor in one of China’s provinces known as Kingold was said to have received the sum of $20 billion as a loan from more than 12 Chinese financial firms. The deal which was made five years ago was sealed with pure gold from the receiving firm as collateral and insurance guidelines in the face of future losses.
However, five years later, the “pure gold” would simply be found to be gold-plated copper disguised as actual gold.
“The 83 tons of purportedly pure gold stored in creditors’ coffers by Kingold as of June, backing the 16 billion yuan of loans, would be equivalent to 22% of China’s annual gold production and 4.2% of the state gold reserve as of 2019.” – ZeroHedge.
Initially, the company was a Hubei based gold factory that had dealings with the people’s bank of China. Upon rebranding, Kingold became an independent company and began to diversify its firm with the production of jewelry designs.
Shortly after, kingold would go on to become China’s largest jewelry manufacturer, with its stocks trading on Nasdaq as $1 per piece. In September 2019, the firm came down with liabilities of $2.4 billion, with its overall asset being valued at $3.3 billion.
Bitcoin takes the upper hand
In the face of the new events, former Google engineer and Bitcoin supporter Vijay Boyapati has reiterated the importance of Bitcoin’s unambiguous supply, which is also impossible to manipulate.
In accordance with Boyapati’s opinion, Bitcoin seems to have a better competitive advantage in terms of its circulating supply, which Boyapati says is one of Bitcoin’s most “underappreciated” qualities. It is also important to note that Bitcoin has been the best performing asset this year, with a 34% spike in value, against gold’s 16%.