Bitcoin has been hailed as the digital gold almost since its inception, but the longer the digital asset lives on in the market, the less this seems to hold true. As Bitcoin grows more popular with investors – both retailer and institutional – the asset is paving its own way. And gold, in comparison, is struggling to hold its weight as a commodity.
The past ten years – the movement of gold
Looking at gold as a commodity, the precious metal has been falling in the past year, with a sharp decline at the beginning of the week highlighting its trajectory.
The past month in gold’s trading shows the decline in the precious metal in the last week. Taking a step further back and looking at gold ten years ago, the price of the metal has been volatile (not dissimilar to Bitcoin), but it has struggled to bring back its high trading value. Instead, gold is looking at a currency price that’s nearly 4% lower than the value it held this time ten years ago.
Source: Goldprice.org
Over the past year particularly, gold has lost nearly 14.66% of its trading value, from a trading high of $2029/oz to $1684.21/oz. The past six months have not been good to the trading value of gold either, with a decline of over $200/oz.
Bitcoin’s strong past decade in contrast to gold
In comparison, Bitcoin – albeit a new asset – has outperformed gold with no signs of flipping negative in sight. While Bitcoin might not be trading at its all-time high of $64,863.10, the token has boasted a much stronger week of trading than its metal ‘counterpart’. Over the past seven days, Bitcoin has gained from $37,458.00 to a healthy $46,637.99, looking at an 18.10% increase in trading value.
The bullish market of the leading cryptocurrency puts it at a current trading value of the equivalent of 21 oz of gold. Cryptocurrency exchange platform FTX noted this with a tongue in cheek tweet last week:
A single bitcoin is now worth 21 ounces of gold. Poetic.
— FTX (formerly Blockfolio) (@blockfolio) August 4, 2021
Bitcoin – “not digital gold”
Investors on both sides of the camp seem to be acknowledging that Bitcoin is not the new gold. Schiff Gold CEO Peter Schiff, an advocate of the precious metal, took to Twitter to vocalize his opinion.
#Bitcoin rising as #gold falls doesn’t mean its replaced gold as an #inflation hedge. Gold is down as traders mistakingly think the Fed will successfully fight off inflation by tapering QE and raising interest rates. Bitcoin doesn’t trade like gold because it’s not digital gold!
— Peter Schiff (@PeterSchiff) August 9, 2021
In response, crypto proponents jumped in to agree that Bitcoin is not digital gold, but veered to say that it’s a better option for investment. Cryptocurrency exchange Kraken’s Dan Held replied to say simply that “Bitcoin is better than gold” linking to why he predicts Bitcoin to stand as the next evolution of money.
In his counter, he pinpointed how Bitcoin differs from gold (and fiat) and why Bitcoin wins out on most metrics of money.
Source: The Held Report
