The Bitcoin v. Gold debate revisited

[barbara44]

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.

To be fair, space exploration is literally for this purpose, not gold but to find resources that will save earth, because we know it will run out and we won't have enough of many things, and that is why we dream of finding some comet or whatever, that we ca mine and profit. That is not going to be easy of course and probably won't be in our life time, and if it does, it will be when we are too old to care, not in the next ten or twenty years.

But the point is that, gold will crash in value one day, it is not going to be soon, we may not even ever see it until we die, but space rockets are a thing, spaceships are going up and down all the time, so we started the travel already, it's just about time to find a place and be able to go, so maybe our children will see it.

[Swordsoffreedom]

Do we really need to pit Bitcoin against Gold? Because I made a topic where I showed the differentiation between Fiat, Bitcoin, and Gold. I explained the functions we can get from Bitcoin and Gold when we invest in them. Here's the link: https://bitcointalk.org/index.php?topic=5563576.msg65972571#msg65972571

It's clear that Gold is great to use during global crises, stock market crashes it remains valuable. That's why Gold is called a SAFE HAVEN. Meanwhile, Bitcoin is high risk, high rewards in nature it's favorable for high-risk investors but brings fear to low-risk investors. But it has strong growth potential while being extremely volatile.

The topic of gold and bitcoin will never stop, especially bitcoin investors will never stop comparing these two assets. Because they think that by comparing these two assets together, they point out the shortcomings of gold and boast that bitcoin can fix those shortcomings. Bitcoin will become the best asset in the world.

Likewise, the topics about bitcoin and fiat currencies will never stop. I believe bitcoin investors will continue to compare it to whatever asset is dominating the world until bitcoin becomes the dominant asset. But I think they're going to have to spend their whole lives doing that, because bitcoin surpassing gold and becoming a safe haven, or surpassing fiat and becoming a global currency, is not going to happen anytime soon. That will not happen in our generation, IMO.

[d5000]

But the problem for me is bitcoin is still very correlated to the stock market as a risk-on asset.

Yes, this is the case because the volatility is still a tick too high to be considered a real "store of value". But as I wrote before, that could change if the current volatility trend continues.

Once the BTC volatility is below the NASDAQ and S&P 500 volatility that change in risk perception could happen imo.

Bitcoin does well when the economy does well. But when the economy does poorly bitcoin can do even worse than the stock market.

The correlation to stock market is a relatively new phenomenon, it started in 2020, earlier there was no correlation. And there are still phases where Bitcoin doesn't correlate at all with the "economy" when there are positive or negative news about the Bitcoin adoption.

Examples are:
- negative news: FTX hack (low correlation to stock market in late 2022), "MtGox refund scare" (low correlation in mid-2024)
- positive news: ETF approval phase (low correlation in late 2023/early 2024).

Source is this chart showing the correlation with S&P 500.

So the challenge is to turn the Bitcoin-internal news positive even if the economy doesn't do that well in the next years. That can happen only imo if the "speculative" character is not more promoted so heavily than until today, and the focus shifts on: 1) the positive long term trend, even if it slows down, and 2) the "intrinsic" qualities of Bitcoin already mentioned. Above all, that the "currency usage" can become increasingly attractive with lowering volatility.

It indicates people are scared to death and fleeing into traditional safe haven assets.

That phase has probably already ended, as people have seen that the trade war wasn't as bad as expected. Gold hasn't scored new ATHs even if it continues to trade high (gold futures only predict a new ATH in late 2026). It can of course go higher, but the "big scare" is probably over I think. Doesn't mean the economy will rally in the next years but I expect more of a stagnation (slight recession or slight growth, but no catastrophic depression).

[capokmerah]

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.

Your points about gold and silver make a lot of sense—precious metals have real industrial demand, which helps keep their prices more stable during economic uncertainty. Bitcoin is fundamentally different because its value doesn’t come from physical utility, but from scarcity, network adoption, and its role as a digital monetary asset.

I agree that matching gold’s market cap might be unrealistic, but Bitcoin isn’t just speculation either. In many countries, it already serves as an alternative store of value when inflation or monetary policy becomes unstable. So in my view, both assets have different roles: precious metals for stability, and Bitcoin for growth potential. A mix of both still makes sense depending on each investor’s risk profile.

[abhiseshakana]

I don't doubt the benefits of bitcoin, that's why I held it for eight years.
But the problem for me is bitcoin is still very correlated to the stock market as a risk-on asset.

Bitcoin does well when the economy does well. But when the economy does poorly bitcoin can do
even worse than the stock market. If it weren't for the tariff trade war and all the crazy stuff Trump has been
doing bitcoin would probably be worth $150K per coin right now, but unfortunately that is not the case.

That's why I started rotating into precious metals earlier this year. The fact that gold and silver prices have exploded
this year by 50% (and still going up) while setting new records is a serious warning sign for the economy.
It indicates people are scared to death and fleeing into traditional safe haven assets. The central banks are jumping off
the Titanic by buying gold and silver like crazy while dumping US treasuries.

When the biggest banks in the world including Bank of America and JP Morgan are recommending a 20% allocation into
gold, that is unprecedented and is a huge red flag. The only reason they would do that is because even they can see
the economy is heading into the toilet and going down like the Titanic.

Just as gold isn't immediately used globally, Bitcoin is going through the same process, only in a much faster, digital version, and in an increasingly digitalized world. Unlike metals, technology accelerates its own adoption due to its network effect (the more people use it, the faster its adoption spreads exponentially, not linearly). Compare this to gold, which doesn't become more useful simply because more people use it. Bitcoin is a monetary network technology. As adoption increases, liquidity increases, infrastructure grows, trust increases, new users join, creating a positive loop and even building an ecosystem, creating a cascade of innovations (lightning network, smart contracts, side chains). The most interesting thing about technology, in my opinion, is the decreasing cost effect over time as infrastructure costs decrease and access becomes easier.

Almost all major monetary innovations begin with low adoption, high volatility, misperception, and institutional resistance. When people think that Bitcoin won't be adopted like gold because people don't understand it, isn't that actually describing the phase of the technology cycle? Not the quality of the monetary asset. BTC is only 15 years old, while gold is thousands of years old. Comparing them today is like comparing the internet in 1995 to modern telecommunications. Gold is mature, while Bitcoin is still growing. While Bitcoin was still in the monetization process, gold had already finished its game. Analysis must consider the timescale.

Although there is a correlation between BTC and the stock market (moving like risk-on when liquidity is loose, falling when the market panics), this is only temporary, a cyclical phenomenon, not a permanent asset. The phenomenon of rising gold and silver prices is indeed a sign of fear, but it doesn't eliminate Bitcoin's existence. In fact, it strengthens the hypothesis that the world is entering a late-stage phase of financial repression, characterized by central banks hoarding gold, institutional investors increasing commodity allocations, government bonds losing confidence, geopolitical fragmentation, and the simultaneous weakening of fiat currencies. This is bullish for gold and Bitcoin, as both are non-sovereign, non-defaultable assets.

When JP Morgan, Bank of America, UBS, and nearly all sovereign wealth funds increased their gold allocations, it wasn't a bearish signal for Bitcoin, but rather a signal that the fiat monetary system was entering a phase of structural dislocation. In this phase, money would flow between gold (the most conservative hard asset), bitcoin (the most portable and digital hard asset), or energy commodities, rarely to a single hard asset.

Bitcoin doesn't replace gold; it simply adds a layer of digital monetization on top of gold's function. Therefore, the notion that Bitcoin won't be adopted because it's not understood, its volatility makes it unsuitable as a store of value, and its high correlation with the market means it has no monetary future misses the broader context: Bitcoin isn't failing, it's still young. Gold isn't a rival to Bitcoin; it's its historical foundation. In times of geopolitical shifts, the two actually strengthen together. Bitcoin isn't a substitute for gold, but rather a digital successor to gold's monetary function.