Bitcoin is emerging as a competitor to gold as a store of value
From Investing.com: 2025-05-08 11:34:00
Gold has been humanity’s chosen store of value for centuries, but now Bitcoin is emerging as a competitor. MicroStrategy CEO Michael J. Saylor believes Bitcoin will surpass gold as a non-governmental store of value. President Trump signed an executive order creating a US Bitcoin reserve, positioning it as a strategic asset. Bhutan plans to mine Bitcoin using hydroelectric power, while El Salvador considers making it legal tender. Tyler Winklevoss of Gemini Exchange sees Bitcoin as a superior form of money to gold. Despite Bitcoin’s rise, gold’s historical role as a symbol of wealth and reliability remains significant. President Trump has vowed to visit Fort Knox to verify the existence of gold, responding to rumors questioning its presence. Bitcoin, introduced in 2009 by Satoshi Nakamoto, is a decentralized digital currency with a fixed supply cap of 21 million coins. The cryptocurrency’s market capitalization has surpassed $1.8 trillion, making it a contender to displace gold. Bitcoin’s blockchain technology has broader uses, supporting applications in finance, supply-chain management, and decentralized finance platforms. Distinguishing Bitcoin from blockchain, its value as money depends on acceptance and use, with companies like MicroStrategy and Tesla investing in the cryptocurrency. In the world of cryptocurrency, Ethereum is known for its “smart contracts,” while Bitcoin offers programmable features like multi-signature wallets. These features can act as substitutes for legal services, such as programmable escrow and automated inheritance transfers.
Bitcoin has rapidly gained popularity as a speculative asset, but it lacks the universal acceptance and intrinsic value that gold has historically enjoyed. Gold’s physical properties and real-world applications make it a valuable commodity, while Bitcoin’s value is derived from its network and online applications. Despite both assets being considered scarce, gold’s scarcity is natural, while Bitcoin’s is algorithmically enforced.
Central banks worldwide are exploring or implementing central bank digital currencies (CBDCs), with China leading the way with its digital yuan. The trend towards digital financial systems raises questions about the future of traditional currencies and the role of physical assets like gold as a store of value. Bitcoin is often referred to as “digital gold,” but it has not proven to be a safe haven like gold. While it offers a fixed supply, independence from government, and decentralization, its lack of independent value, volatility, reliance on advanced technology, and competition from other cryptocurrencies raise doubts about its long-term viability. Gold, on the other hand, has been the ultimate store of value for centuries. (Source: AIER’s The Daily Economy)
Read more at Investing.com: Is Bitcoin Ready To Retire Gold?