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For thousands of years, spanning across generations of societies, gold has the indisputable record as one of the only asset classes to be revered for it’s continued ability to preserve value. 

As bitcoin becomes more popular, and gold continues to be an established store of value, it is natural that the two assets will be compared.

Bitcoin operates as a platform currency–meaning its worth lies in its ability to buy things or transfer wealth. Gold has traditionally been used as a store of value– meaning its worth lies in what it can produce or buy, such as jewelry and electronics.

In this article we’ll compare bitcoin vs gold on several different metrics to see which one comes out on top!

The Genesis

Gold often is the genesis to launch empires and cement them into our history books but it’s the transition away from gold, the debt-backed issuing of fiat currency, or paper money, that eventually leads to the downfall of these unsustainable economies that drown in debt.  

The creator of Bitcoin, Satoshi Nakamoto, understood the importance of preserving value and and in his brilliance, delivered us the first crypocurrency that has many of the same qualities we find so valuable in gold. 

Let’s cover a few things Bitcoin and gold have in common. 

Just like gold, you can’t create Bitcoin out of thin air. The process of finding gold and creating Bitcoin is called ‘mining’, of course the actual practice is a bit different as you can imagine.

Bitcoin mining is done with your computer, or a set of computers known as mining rigs, and they are working to solve complex mathematical problems. The first cycle of mining in 2009 kicked out 50 Bitcoin, but today; due to competition,the number of coins already in the economy, and compounding difficulty with exponentially more challenging math problems, it’s taking longer to solve and is producing less coins going forward. 

It may sound a little confusing but don’t get caught up in the technical stuff. Unlike gold, Bitcoin is solving the real problem of quantity. Gold production tends to increase a small percentage year-over-year but somehow we are sold on this being a finite metal and the price keeps going up.

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Bitcoin: The Digital Gold

Bitcoin has been referenced to as the new gold, gold 2.0, or digital gold.. take your pick, but the saying is true in a lot of ways. Gold has always been cherished as a long-term store of value but there are a couple problems with having and using gold transactionally that Bitcoin is able to solve.

5 Key differences between Gold and Bitcoin

Bitcoin is truly limited: Gold has always been a terrific asset class for hedging against inflation and people usually buy gold as an insurance policy for their money, mostly because it’s historic track-record of maintaining value and because there is a limited supply. We encourage people to buy gold and diversify their portfolio as much as possible but keep in mind that gold production seems to be discreetly increasing 1-2% every year. Bitcoin quantity cannot be increased or altered. There are around 21 million coins that will ever be released and already 18 million have been mined.  You can get gold any time but Bitcoin mining will end at some point and who knows where the value goes after that?

Transacting: With your mobile device or laptop you can move any amount of Bitcoin you want anywhere in the world. You can also go to your store and many places are now accepting Bitcoin or you can use a credit card that allows you to spend from your Bitcoin balance.

Sending physical gold is expensive and a hassle and you risk the chance of the package getting lost in the mail. Using Bitcoin for transacting is a clear winner here.

Gold can be seized: You might not think this can happen but look at 1933 when President Franklin D Roosevelt implemented measures to prohibit and criminalize its possession of gold in the US. They confiscated the citizens gold because the country was bankrupt. Confiscating your Bitcoin is not as easy. Even if your government wanted to ban you from using Bitcoin, it can’t be stopped or shutdown. They tried. 

No middleman: If you own your gold physically then you can do what you want with it but what if you rely on a service that handles your gold for you? You have to work on their hours, usually only Monday through Friday and there are always going to be management and processing fees involved.  With Bitcoin, there is nobody to watch or manage your money because the blockchain ledger handles it all for you.

Think of the blockchain as your permanent record keeper, accountant, banker and infrastructure that can do all the buying, selling and exchanging for you. No middleman involved ever so you get to keep all that extra money you usually have to pay people. 

Convenience: I am sure after you are reading all this you are thinking how much easier this makes your life. Bitcoin can do everything gold can plus more but we are by no means dismissing the importance of owning gold. We love Bitcoin but it’s hard to dispute the multi thousand year record gold has.  With that said, Bitcoin improves on a lot of the areas that gold lags in and that is certainly convenience.  Having and being able to travel with anonymous amounts of money anywhere around the world that nobody but you can access should make you really start to understand why so many people are wanting to own Bitcoin.  

Why People Own Bitcoin and Gold

Everyone has their own reason for wanting to own gold or Bitcoin but it usually stems from wanting some kind of barrier and diversification away from fiat currencies. Fiat currencies never survive and gold has always been the best way to protect your assets throughout history. People see a lot of similarities and improvements with Bitcoin and feel it’s a smart place to store their money long-term.

Another group of people are looking for smart ways to grow their money and Bitcoin has been one of the best performing assets over the last decade.  It was considered a huge risk to put your money into Bitcoin but as of recent, more and more big business adopting the technology have proven to the public that this is a safe environment.

In the end, people want to protect their money and grow their wealth and Bitcoin and gold are some of the best places to accomplish this. 

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Value of Gold vs Bitcoin

The value of Bitcoin and gold were pretty close for a while but since 2017, we have seen Bitcoin explode in value reaching around $19,000 and then dropping back to around $3,000. 

Since then, Bitcoin has bounced between $to all time highs, bouncing back and forth between $45,000 and $60,000 in first half of 2021.

Gold is volatile but with not as big of swings. Gold bounced back and forth between $1300 and $1800 over the last ten years but recently, growing sentiment and worry over stability of the economy has led people into assets that are more stable with room to appreciate. 

The price of gold going up is a strong indicator that confidence in the dollar is waning. 

Watching the price go back and forth when you have money in the asset can be emotionally draining so it’s best that if you plan on buying either Bitcoin or gold, you only spend what you can afford to lose. There are no guarantees but we believe in the long-run these are both going to be outstanding performers. 

How does Bitcoin perform in bad economic times vs gold?

People are often curious about how Bitcoin and gold is effected during more challenging economic times and the reality is that these assets exist so you can hedge against any type of financial turmoil up ahead. Gold hit almost $2,000 during the last financial crisis in 2009 and that was the year Bitcoin was created but it gained a lot of interest as people looking for alternative options for their money. 

People and countries often turn to gold once they lose faith and confidence in the value of a currency.  When confidence is strong in a currency,you will see countries holding large volumes of treasuries in their portfolio but when they sense weakening values, they shift to hording gold. 

It is believed that Bitcoin will be a strong hedge like gold but unfortunately we won’t know how it performs until the next financial cycle. 

Gold and Bitcoin IRA

A great way to protect and grow your money is by leveraging the power of an IRA. You can get a gold IRA or you can do a Bitcoin IRA.  

Wrapping up, we applaud you for your doing your research to understand the difference between Bitcoin and gold and how they compare. Having a financial plan is not only smart but it’s crucial and dipping your toe into these amazing assets might be exactly what you need to have the lifestyle and retirement that you want. 

Keep checking back to for more info about Bitcoin and cryptocurrency. 

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Patrick Moore
Patrick has been a part of the cryptocurrency community since 2014 and created CryptoWhat in 2015 to help new users learn more about cryptocurrencies. Despite not being a financial expert, his passion for cutting-edge technology drives him to share knowledge and information with as many people as possible about the potential of cryptocurrencies and how they will change the financial sector.