Here Is Why Gold Can’t Keep Up With Bitcoin

In a world of scarce resources, clichés seem to abound. There is too many of them, and one of the most prominent ones when it comes to cryptocurrency refers to Bitcoin as the digital equivalent of gold. Nevertheless, when the price of this so called ‘digital gold’ quadruples that of its physical equivalent per unit – if a troy ounce could ever be equated to 1BTC – then it is time to call the cliché into question. The truth is that gold prices cannot keep up with gold because the comparison is profoundly flawed.

When we Equate Bitcoin to Gold, we can Explain it to a Broader Audience

There is no doubt that both assets bear some resemblance. That is enough to create a cliché and then use it to explain a complex digital asset to a broader audience. The following are some of the characteristics that gold and bitcoin share. These are the characteristics upon which the cliché was built:

However, Bitcoin and Gold Should not be Compared!

There might be more similarities between both assets, but as we run out of similarities to write on that list, we start stumbling upon the differences between them. The following is a brief list of different features that put gold and Bitcoin in radically different categories:

Gold Can’t Fill Bitcoin’s Shoes

The differences between these 2 assets make them ultimately incomparable. Moreover, the differences between gold and Bitcoin debunk the ‘digital gold’ cliché, and leave us with a situation in which we can conclude that gold can’t fill bitcoin’s shoes. Apart from industrial usage, the arguments in favor of using bitcoin instead of gold are all arguably superior. Hedging with gold forces the investor to trust multiple parties, given how difficult it is to transact with, transport and store gold. The gold game exposes the investor to a myriad of risks, including the nationalization of their wealth. Bitcoin is completely trust-less and governments would find it extremely difficult to take away from its owners.

Now that markets are catching up to this reality, it is not difficult to see why gold prices can’t keep up with those of bitcoin. The troy ounce of gold could well be bound to trail the price of a single coin from now on. Eventually Bitcoin could become as universally acceptable as gold even if it is not as culturally significant. Nevertheless, if any investor is looking for an asset that can keep them safe while competing with gains in other traditional markets, then Bitcoin should be their choice. Ultimately, gold has shown it can’t keep up with traditional markets, let alone Bitcoin prices. So, it is time to stop using the cliché, and start giving bitcoin the credit it deserves.

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Original Post: Here Is Why Gold Can’t Keep Up With Bitcoin

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