The Bitcoin v. Gold debate revisited

[el kaka22]

Gold is way too high right now to be considered a good investment. Even bitcoin, after all this drop, is a better investment because there is a limit it could fall to. Looking at the support, 45k is the bottom that we can reach, which we will keep on dropping for a year until we reach that level, which shows you neither gold nor bitcoin is good to buy at this moment, but at least we know the bottom of bitcoin and how it will recover.

Gold is peaking and looking terrible for right now, I highly doubt it can keep this up and keep going higher, we are going to start seeing it go down eventually, and there is no reason to buy at the peak, it's like buying bitcoin at 125k and waiting, would be a bad mistake.

[Danica22]

For bitcoin to surpass gold, the demand for it needs to be greater than gold. How can a speculative asset, which has never experienced any economic crisis or world war, win the trust of mankind and replace the role of gold in this world? This is not as easy as you think, because it is easier said than done.

For Bitcoin to surpass its market capitalization gold it must first reach a price of $1.4 million per coin, and I'm sure that requires a slightly longer process, although most people are currently skeptical. (https://finance.yahoo.com/news/strategy-profit-tops-estimates-bitcoin-210000761.html) This is a brief reading that might help you understand it, because I believe Bitcoin will be able to surpass gold's market capitalization in the future. Furthermore, no one is saying Bitcoin will surpass gold's market capitalization anytime soon, as everything takes time, so this could happen in the future. I believe Bitcoin has also experienced economic crises during Covid and several global wars, although the scale is not as great as what gold has experienced in the past.

How long will it take for bitcoin price to reach $1.4 million? 10 years or 50 years or more, do you think the gold market capitalization will stop at 30 trillion dollars?

Covid is considered an economic crisis, but it only caused huge human losses and the government pumped in a large amount of money to save the economy in time. Bitcoin is not the only asset that has grown and survived the covid pandemic. Most stock markets have also grown and weathered the covid pandemic or the Russia vs Ukraine war. Do you think one day they will also surpass gold just because they have been through 2 crises like bitcoin?.

To me, just comparing the demand for these two currencies, it is easy to see that bitcoin has almost no chance of surpassing gold even in 100 years.

[shinratensei_]

Just for your information that 92% of gold demand is for investment and only 8% actually utilized for industrial/technological applications.
Gold in my opinion also depends on speculation otherwise the price won't be this high. But speculation in gold is just more robust and stable since it's an old asset.

Bitcoin has its use for remittance, and so on with its decentralized blockchain. At some point I think the market capitalization can come close to gold.

[fuguebtc]

Gold is way too high right now to be considered a good investment. Even bitcoin, after all this drop, is a better investment because there is a limit it could fall to. Looking at the support, 45k is the bottom that we can reach, which we will keep on dropping for a year until we reach that level, which shows you neither gold nor bitcoin is good to buy at this moment, but at least we know the bottom of bitcoin and how it will recover.

Gold is peaking and looking terrible for right now, I highly doubt it can keep this up and keep going higher, we are going to start seeing it go down eventually, and there is no reason to buy at the peak, it's like buying bitcoin at 125k and waiting, would be a bad mistake.

Agreed, while both are good assets and worth investing in. But indeed, neither is a good investment at this point.

A good investment is one that brings us profit and not loss. But it is clear that with the current situation, both Bitcoin and gold have peaked. Buying at this point only makes them a bad investment, because instead of making a profit, we will most likely incur a loss.

However, just as we can predict the bottom and how bitcoin will recover, we can do the same with gold. Gold will definitely recover and increase in price over time, and this has been proven for thousands of years, it is not something new.

[headingnorth]

Gold is way too high right now to be considered a good investment. Even bitcoin, after all this drop, is a better investment because there is a limit it could fall to. Looking at the support, 45k is the bottom that we can reach, which we will keep on dropping for a year until we reach that level, which shows you neither gold nor bitcoin is good to buy at this moment, but at least we know the bottom of bitcoin and how it will recover.

Gold is peaking and looking terrible for right now, I highly doubt it can keep this up and keep going higher, we are going to start seeing it go down eventually, and there is no reason to buy at the peak, it's like buying bitcoin at 125k and waiting, would be a bad mistake.

Agreed, while both are good assets and worth investing in. But indeed, neither is a good investment at this point.

A good investment is one that brings us profit and not loss. But it is clear that with the current situation, both Bitcoin and gold have peaked. Buying at this point only makes them a bad investment, because instead of making a profit, we will most likely incur a loss.

However, just as we can predict the bottom and how bitcoin will recover, we can do the same with gold. Gold will definitely recover and increase in price over time, and this has been proven for thousands of years, it is not something new.

No one can know the top or bottom of anything. There are only probabilities. But you are right gold is likely to recover
from its recent dip and keep going higher.  At the moment gold is still holding above $4000 per ounce as well as silver
at about $50 per ounce, historic highs for both.  

When gold reached $2000 per ounce people said it couldn't go any higher, but then it went on to break through $2500 and $3000,
and shot up well past $4000. As the economy deteriorates because of money printing, record debts, economic mismanagement by politicians,
etc. gold will likely keep going higher well into next year. All the major US banks are even recommending a 20% allocation into gold.

On the other hand, bitcoin is more likely to keep going down or sideways because it tends not to do well in bad economic times.


Morgan Stanley forecasts gold prices to reach $4,500/Oz by mid-2026
 
JP Morgan Forecasts Gold Prices Topping $5000 in 2026

[doomloop]

Even as bitcoin becomes globally adopted, every country allows its citizens to invest or the government to add bitcoin to its national reserves. That doesn't mean that 8 billion people in the world will invest in bitcoin, or that all governments will sell gold to buy bitcoin. Meanwhile, not only do billions of people invest and own gold, banks also hold the majority of gold and gold is also used in industries as OP mentioned. So it is very unlikely that Bitcoin to approach gold's market capitalization.

Honestly, I am a bitcoin investor, but I also doubt that bitcoin can surpass gold.

In terms of real use case, yes bitcoins might not really surpass gold but I think that in terms of market capitalization, bitcoins might come close to gold or might even surpass gold in future when mass adoption will come into picture.

People love investing in gold because it gives financial stability and can serve needs in terms of emergency. Gold is also considered as a luxuries metal and can be used to show-off the financial wealth. Bitcoins are a silent player here. Not everyone will brag about having bitcoins but they will silently hold bitcoins to make profits. Profits might be the same or even more when it comes to holding bitcoins. Gold will be one of the important metal always because of it's physical properties but we should not think less of bitcoins but it does posses some really good virtual properties and can be beneficial for long run similar to gold.

[Iranus]

In terms of real use case, yes bitcoins might not really surpass gold but I think that in terms of market capitalization, bitcoins might come close to gold or might even surpass gold in future when mass adoption will come into picture.

People love investing in gold because it gives financial stability and can serve needs in terms of emergency. Gold is also considered as a luxuries metal and can be used to show-off the financial wealth. Bitcoins are a silent player here. Not everyone will brag about having bitcoins but they will silently hold bitcoins to make profits. Profits might be the same or even more when it comes to holding bitcoins. Gold will be one of the important metal always because of it's physical properties but we should not think less of bitcoins but it does posses some really good virtual properties and can be beneficial for long run similar to gold.

Bitcoin will always give better returns than gold, but as I said, not everyone likes to invest, let alone trust investing in a virtual asset that cannot be touched. And as you have admitted, bitcoin cannot surpass gold in terms of practical applications. That means the demand for bitcoin will never exceed the demand for gold. How can it be equal to gold in terms of capitalization?

Frankly, bitcoin investors like us expect and believe it will surpass gold. That is just a somewhat illusory expectation of Bitcoin investors, because reality shows that possibility is very low.

[BRINIRHA]

So the market for gold and silver is basically unlimited while bitcoin has to rely solely on the speculation market, which is far more limited.
Everyone in the world owns gold and silver in one form another, because everybody has a cellphone, computer, jewelry, drives a car, etc.

When people like Michael Saylor say bitcoin could one day reach the marketcap of gold or silver, well that is just not possible imo
since there is no market for bitcoin beyond speculation or investment. In bad economic times precious metals hold their value while bitcoin sells off.

Bitcoin used to be a huge part of my portfolio but after I realized these things it became less than 2%. I even once believed
bitcoin could replace the marketcap of gold some day but in hindsight that was a rather silly belief lol.

What if one day a mountain containing vast amounts of gold is discovered, flooding the market? Unlimited supply can sometimes affect market prices. Personally, I also believe in the enduring value of gold due to its usefulness in various fields. Even in beauty and medicine, gold still has a role to play within certain limits. However, I prefer to think of gold as a store of value rather than an investment.

Therefore, for me, both gold and Bitcoin have two distinct roles that should be held.

Gold must be owned because its value always remains stable and is not eroded by inflation. (Many may think that my opinion about the value of gold is wrong, because surely many believe that the value of gold continues to increase. However, it is only the number on the fiat currency that increases, while the value remains the same. This is because even though the dollar amount continues to rise, when exchanged for things such as land prices and the like, there is not much change). Meanwhile, we must also own Bitcoin because if the world continues to move towards the digital era and perhaps one day the era of total digitalization will make Bitcoin much more valuable. Its value will continue to rise because of its limited supply.

Regarding the current market capitalization of gold and Bitcoin, the difference is still quite significant. However, it is not impossible that in the digital era, Bitcoin's market capitalization could reach that of gold. Nothing is impossible. For me, gold and Bitcoin are equally important at this time. However, everyone has different opinions, and that is the right of each of us.

[headingnorth]

So the market for gold and silver is basically unlimited while bitcoin has to rely solely on the speculation market, which is far more limited.
Everyone in the world owns gold and silver in one form another, because everybody has a cellphone, computer, jewelry, drives a car, etc.

When people like Michael Saylor say bitcoin could one day reach the marketcap of gold or silver, well that is just not possible imo
since there is no market for bitcoin beyond speculation or investment. In bad economic times precious metals hold their value while bitcoin sells off.

Bitcoin used to be a huge part of my portfolio but after I realized these things it became less than 2%. I even once believed
bitcoin could replace the marketcap of gold some day but in hindsight that was a rather silly belief lol.

What if one day a mountain containing vast amounts of gold is discovered, flooding the market? Unlimited supply can sometimes affect market prices. Personally, I also believe in the enduring value of gold due to its usefulness in various fields. Even in beauty and medicine, gold still has a role to play within certain limits. However, I prefer to think of gold as a store of value rather than an investment.

 

It is possible to one day find a huge deposit of gold and flood the market, but it is unlikely. That is because gold has been mined
for thousands of years and all the big easy to mine surface deposits have long been discovered and exploited.

Most of the world's easy to access surface deposits have been depleted. What we are left with are the deeper below surface deposits that cost
more to dig and extract from. That is why prices for both gold and silver have skyrocketed in recent years. Precious metals are becoming more rare
and harder to mine while demand is always increasing, especially for silver which is used heavily in industry and manufacturing.

Even if you find a large surface deposit it is likely located in an area that is too remote to mine cheaply, or at all because the transportation
and logistics of moving the gold or silver out makes it cost prohibitive. That is, until the prices go up high enough then the mine can become economically
viable to make the investment. But even then it doesn't happen overnight. It often takes years to set up a new mine for production and start producing.

[BALIK]

What if one day a mountain containing vast amounts of gold is discovered, flooding the market? Unlimited supply can sometimes affect market prices. Personally, I also believe in the enduring value of gold due to its usefulness in various fields. Even in beauty and medicine, gold still has a role to play within certain limits. However, I prefer to think of gold as a store of value rather than an investment.

 

It is possible to one day find a huge deposit of gold and flood the market, but it is unlikely. That is because gold has been mined
for thousands of years and all the big easy to mine surface deposits have long been discovered and exploited.

Most of the world's easy to access surface deposits have been depleted. What we are left with are the deeper below surface deposits that cost
more to dig and extract from. That is why prices for both gold and silver have skyrocketed in recent years. Precious metals are becoming more rare
and harder to mine while demand is always increasing, especially for silver which is used heavily in industry and manufacturing.

Even if you find a large surface deposit it is likely located in an area that is too remote to mine cheaply, or at all because the transportation
and logistics of moving the gold or silver out makes it cost prohibitive. That is, until the prices go up high enough then the mine can become economically
viable to make the investment. But even then it doesn't happen overnight. It often takes years to set up a new mine for production and start producing.

This is the hypothesis that bitcoin investors often use to lower the value of gold. But that is very unlikely to happen, and even if it does happen, I don't think it will change or cause chaos in this precious metals market. Because the demand for gold is so great that we have been mining gold for thousands of years, but still cannot meet human needs. How can we meet that demand over the next few decades or centuries, even if we found a large supply of gold?

Gold is not like other assets, its supply is larger, that will only increase its capitalization and demand will be higher. Because it has so many practical applications and is applied in almost every industry. Especially as the demand for luxury, extravagance and technological advancements increases, the demand for gold and silver will increase even more.

Honestly, the demand for bitcoin may decrease in the future if we find investments that can give better returns. But the demand for gold will only increase over time. Gold is more special than anything.

[abhiseshakana]

What if one day a mountain containing vast amounts of gold is discovered, flooding the market? Unlimited supply can sometimes affect market prices. Personally, I also believe in the enduring value of gold due to its usefulness in various fields. Even in beauty and medicine, gold still has a role to play within certain limits. However, I prefer to think of gold as a store of value rather than an investment.

 

It is possible to one day find a huge deposit of gold and flood the market, but it is unlikely. That is because gold has been mined
for thousands of years and all the big easy to mine surface deposits have long been discovered and exploited.

Most of the world's easy to access surface deposits have been depleted. What we are left with are the deeper below surface deposits that cost
more to dig and extract from. That is why prices for both gold and silver have skyrocketed in recent years. Precious metals are becoming more rare
and harder to mine while demand is always increasing, especially for silver which is used heavily in industry and manufacturing.

Even if you find a large surface deposit it is likely located in an area that is too remote to mine cheaply, or at all because the transportation
and logistics of moving the gold or silver out makes it cost prohibitive. That is, until the prices go up high enough then the mine can become economically
viable to make the investment. But even then it doesn't happen overnight. It often takes years to set up a new mine for production and start producing.

This is the hypothesis that bitcoin investors often use to lower the value of gold. But that is very unlikely to happen, and even if it does happen, I don't think it will change or cause chaos in this precious metals market. Because the demand for gold is so great that we have been mining gold for thousands of years, but still cannot meet human needs. How can we meet that demand over the next few decades or centuries, even if we found a large supply of gold?

Gold is not like other assets, its supply is larger, that will only increase its capitalization and demand will be higher. Because it has so many practical applications and is applied in almost every industry. Especially as the demand for luxury, extravagance and technological advancements increases, the demand for gold and silver will increase even more.

Honestly, the demand for bitcoin may decrease in the future if we find investments that can give better returns. But the demand for gold will only increase over time. Gold is more special than anything.

The probability of a gold flood is nearly zero, but not zero. Supply will change if there is an upgrade in extraction technology, or if the asteroid mining project is successful. Gold can increase, while Bitcoin cannot, which ultimately becomes the fundamental difference between gold and Bitcoin. Gold supply is not absolute. Bitcoin supply is absolute. The high demand for gold for industry and manufacturing (economic functions) actually demonstrates gold's limitations as a modern SoV (monetary function). Gold's value is 90% determined by trust and only 10% by industrial use. Meanwhile, Bitcoin's demand stems not from industry but from the needs of the monetary network (hedging, global settlement, strategic reserves). This is why Bitcoin is purer as a store of value.

Gold demand will always rise, while Bitcoin can fall. History shows that from 1980 - 2000, gold demand increased but the price fell. So, even though demand is stable, gold prices do not always rise due to monetary sentiment. Bitcoin has a halving cycle (an internal mechanism that creates a supply shock every four years). Bitcoin doesn't need industrial demand to maintain its monetary value; it maintains its value through network consensus and its absolute scarcity.

You might think Bitcoin relies solely on speculation. This might have been true in the past, but it's now wrong. Today, Bitcoin is used for: national strategic reserves, financial system backup, global corporate reserve assets, sovereign-level international settlements, geopolitical hedging, and interstate payments without intermediaries. Bitcoin has shifted its role from speculative tech to a monetary asset, not just a retail asset, and is starting to become an alternative hard money.

Bitcoin demand doesn't need to rise forever; it needs stable demand. If demand is stable and supply continues to decrease (halving), the price will continue to rise. This is Bitcoin's asymmetric monetization mechanism, which gold lacks.

[viljy]

I don't agree with OP at all. First of all, where exactly is the average 15 grams of silver contained in each gasoline car? In the interior trim? Why not platinum or diamonds? Every gasoline car has palladium in the catalyst. Every diesel car has platinum in the catalyst. These are basic truths. Where is there silver in every car? Silver-plated spark plug contacts? Where are the 15 grams?

I also do not consider the silver market and, moreover, the gold market to be limitless. This is a limitless market for copper. 99% of gold is just an investment asset and only a small fraction is used in the jewelry industry and technology.  Silver is too expensive for mass use, so silver's main competitor is copper. If we talk about metals, then the main wealth with unlimited demand is rare earth metals.

[DanWalker]

Just for your information that 92% of gold demand is for investment and only 8% actually utilized for industrial/technological applications.
Gold in my opinion also depends on speculation otherwise the price won't be this high. But speculation in gold is just more robust and stable since it's an old asset.

Bitcoin has its use for remittance, and so on with its decentralized blockchain. At some point I think the market capitalization can come close to gold.

More precisely, about 55% is used for jewelry, about 20% of the gold supply is used as national reserves and is held by global central banks. About 10% is used for gold ETFs and similar investment models, and 8%-10% is used for industry.

From these figures, it can be seen that the biggest demand for gold comes from jewelry and national reserves. How can Bitcoin compete with gold in market capitalization when it cannot compete in the areas where gold dominates?

[headingnorth]

I don't agree with OP at all. First of all, where exactly is the average 15 grams of silver contained in each gasoline car? In the interior trim? Why not platinum or diamonds? Every gasoline car has palladium in the catalyst. Every diesel car has platinum in the catalyst. These are basic truths. Where is there silver in every car? Silver-plated spark plug contacts? Where are the 15 grams?

I also do not consider the silver market and, moreover, the gold market to be limitless. This is a limitless market for copper. 99% of gold is just an investment asset and only a small fraction is used in the jewelry industry and technology.  Silver is too expensive for mass use, so silver's main competitor is copper. If we talk about metals, then the main wealth with unlimited demand is rare earth metals.

You understand how electricity works right? Silver is the most conductive material known to man,
which is why it is used in the electronics of hundreds of billions of vehicles, TVs, laptops, cell phones, AI computer chips, etc.

The silver content is even greater for hybrid and electric vehicles than for gasoline vehicles. My point is, every person on the planet
owns silver in the form of jewelry and consumer goods alone. That is why I say the market for precious metals is virtually unlimited.

OTOH not every person on the planet owns bitcoin (not even 1%). So we are talking about less than
1% of the world population owning bitcoin compared to nearly 100% owning gold and silver.

The average person doesn't even know what bitcoin is, much less own any. But the average person does know and owns gold and silver.
So when people like Cathie Wood and Michael Saylor claim bitcoin will reach the marketcap of gold within 5 to 10 years they are living in fantasyland.

The marketcap of gold is greater than that of all of the MAGNIFICENT 7 companies put together.
Do you really believe the marketcap of bitcoin will be greater than the MAG 7 put together within 10 years?

It will not do it in even 50 years let alone 10. That is not a criticism of bitcoin, it is a criticism of those who make such wild fantastic predictions.
But they do it because they make money when people buy their ETFs and MSTR stock, so that's why they say such crazy things.

I have made a lot of money from bitcoin myself, but I also recognize the limitations of bitcoin as an almost purely speculative asset and adjusted
my portfolio accordingly (now <2% in bitcoin). The biggest financial institutions in the world today are advising 20% allocation into precious metals
especially gold and silver because they recognize their status and value as safe haven assets.

[viljy]

~

~

If you relied on AI, then look: the AI's answer is exactly the opposite of yours. Given my experience, I can say with absolute certainty that the average silver content in gasoline cars is much less than 15 grams.

Gasoline vehicles contain an average of 10 to 15 grams of silver for example.

There's silver in there. But not 15 grams.

[khiholangkang]

Just for your information that 92% of gold demand is for investment and only 8% actually utilized for industrial/technological applications.
Gold in my opinion also depends on speculation otherwise the price won't be this high. But speculation in gold is just more robust and stable since it's an old asset.

Bitcoin has its use for remittance, and so on with its decentralized blockchain. At some point I think the market capitalization can come close to gold.

More precisely, about 55% is used for jewelry, about 20% of the gold supply is used as national reserves and is held by global central banks. About 10% is used for gold ETFs and similar investment models, and 8%-10% is used for industry.

From these figures, it can be seen that the biggest demand for gold comes from jewelry and national reserves. How can Bitcoin compete with gold in market capitalization when it cannot compete in the areas where gold dominates?

I was previously confused about where the data came from then I googled it and I found this.



Data source

I don't know which data is the most correct in the percentages shown, but there is a slight similarity that the big demand is for jewelry use.
It is very difficult to compete with gold, bitcoin is not that high yet, and today we know that the capitalization of gold is several times the capitalization of bitcoin now, it still takes a very long time for bitcoin to approach the capitalization of gold, maybe another decade or two.

[headingnorth]

There is no reasoning with some people. I think some people are delusional about bitcoin soon over taking the marketcap of gold.
That is not likely to happen in 10 years, 20 years, or even 100 years. Common sense tells us the chances of it ever happening are extremely remote.

I will explain why:

For most investments such as stocks, precious metals, oil, wheat, corn, etc. the speculative nature accounts for around 10 to 20% of the price.
Some stocks can be much more speculative than others such as AI stocks but in general it averages 10 to 20%.

That is because stocks represent real products and services. When people buy an Apple iPhone they aren't buying to speculate
on the price. They are consuming a real product or service. They will keep it until it stops working and dies and then they buy another iPhone.
So it's like they are HODLing it forever. Same thing with gold jewelry. People buy a necklace or wedding ring and keep it forever.
They normally don't buy it to make money or profit.



But the speculative nature of bitcoin is much higher accounting for probably 99% of its value. Because people are constantly buying and selling
bitcoin within a short period of time. They aren't holding it forever. Some people do HODL bitcoin forever but they are the exception not the rule.

The other big thing that makes bitcoin much more unstable and volatile is the crazy leverage people often use to gamble on the price.
Using 10x, 20x, 100x leverage, etc. No one does that kind of leveraging with stocks or precious metals, but in the crypto world it is very common
and makes the market incredibly volatile.

The OG HODLers you always hear about could afford to hold bitcoin for 10+ years because they bought in very cheaply.
Back in the early days of bitcoin you could buy a hundred bitcoins for a few dollars. So you could afford to hold onto it for 10 years or more
because you got it for almost nothing.

But imagine someone buying just one bitcoin today at $100,000 per coin. They are not likely to hold on to it for 10 years simply because there is now much more to lose. They are likely to sell after making a modest profit of let's say 10 to 20%. Why? Because the high volatility of bitcoin tends to shake people out and scares them from holding it for very long. The OGs who bought bitcoin for almost nothing didn't mind holding it forever because even it went to zero they wouldn't be losing much.

HODLing and "never sell your bitcoin" are nice slogans but that is much easier said than done for most, for something so volatile
and when the prices are now much higher.