Bitcoin isn't underperforming yet, gold is just catching up

[Furball808]

https://x.com/Polymarket/status/2016909983707718086
If you look at the latest news, the price of gold has plummeted after attracting attention some time ago. Its value lost approximately $3.4 trillion in one hour. On January 29th, gold hit its ATH, but shortly afterward, the price dropped 8.7% in a short period. This was all due to the collapse of American tech stocks, including Microsoft (MSFT), Oracle, and Nvidia. In other words, Bitcoin can always recover faster and has an advantage over other assets compared to gold and silver.

Both assets really have their own risks. They have their own pros and own set of cons so it really just depend on us which one do we prefer. The most ideal scenario would be to own both to cover all the bases.

[d5000]

Gold is rare, just like BTC. Gold to a large extent is decentralized, just like BTC. Gold is durable, has high liquidity, industrial use. Gold is also a safe haven asset, etc. It is the fact that it is a safe haven asset that governments buy it and store it in their reserves, that does not count as 'validation' in my own opinion. They are utilizing its already existing qualities and not adding anything to it at all.

Im more on OP's side here. Gold without central banks would have a fraction of its current value. 20% of all (currently known and extracted) gold is held by Central Banks. That's an inmense chunk.

I really hope that never happens to Bitcoin and the Bitcoin holdings of government institutions stay under 10% (currently it's about 3-5%, depending on if you cound China's "alleged" holdings or not). (see also this thread).

And I think the big Central Bank gold holdings could even be a Damocles' sword in some distant future for its value. Gold is an almost totally unproductive asset, it only is valuable because there are no other assets with its qualities, mainly its rarity (industrial usage is negligible, jewelry is relevant but also only exists because it's "valuable"). But when gold is no longer needed as a Store-of-value because there are objectively better assets (I would count Bitcoin here, but we're still not there due to the speculative character of BTC) then its value could sharply decline. There could be a chain reaction: Central banks sell, gold crashes, retailers panic and sell their grandma's jewelry, and so on, until it deflates to its price justified by industrial usage, which is probably much less than 30% of the current price.

But we're far away from that. For now gold seems to have stabilized at 4700-4800 $. Still a very high price.

Bitcoin is imo indeed different because it has excellent qualities as "money" and in theory its value comes from usage, just like fiat currencies. It may be currently a little bit overvalued if we only take the current currency-like usage into account, but due to its potential future usage, it could be actually undervalued. Gold is somewhat censorship resistant but very difficult to use for payments.

[Bluedrem]

Since the price of Bitcoin has fallen by about 40% from its ATH, perhaps there is so much criticism about the price of Bitcoin. To be honest, Bitcoin is not that stable yet. It is still affected by global politics and global context. But I can swear that Bitcoin is still a thousand times better than gold. No one is aware of the fixed supply of gold, so if for some reason the excess of gold increases at some point or if an alternative to gold is created, the price of gold will fall, but due to the fixed supply of Bitcoin and its decentralization, when it is added to the list of more people's preferences, it will be very stable and it will not be influenced by a single person.

[davis196]

Gold would never hit 5300 USD per troy ounce, if there wasn't aggressive money printing.
Bitcoin would never hit 125K USD, if there wasn't aggressive money printing.
The prices of all financial assets are pumped by the money printing machines. The markets moving down or sideways is mostly a result of geopolitical tensions, Trump being stupid or the people being fascinated by "the next big thing" or the next "shiny object" like AI technology.
All the comparisons between gold and "digital gold"(BTC) are becoming redundant. The gold price dropped, the Bitcoin price dropped as well. Why? Because Trump nominated another Federal Reserve chairman. This is yet another proof that the Federal Reserve more or less dictates what happens on the financial markets.

[slaman29]

Depends on what 'underperforming' means. Its always about expectations.

Nobody expected gold to do what it did.

Even less people expected silver to do what it did.

But think about Bitcoin and how many people expected 100k vs how many people thought it would die. Did Bitcoin really underperform in that context?

[MarryWithBTC]

I think holding gold for the past five years has given a higher return than bitcoin. That being said, it's just a nitpicking of their charts. If I choose six years, bitcoin beats it, if I choose ten years it obviously beats gold again, etc. In the past year, gold beats it. In the past two years, gold also beats it.

Wait another year, and let's check again. 

So you mean bitcoin is the king in the long term game?
To me, bitcoin has proven that it has got its place in the financial industry.

Remember, some years ago, bitcoin was seriously being compared to some random ponzi schemes.
But today, it is being compared with about the most important universal asset. This is a win.

Gold is rare, just like BTC. Gold to a large extent is decentralized, just like BTC. Gold is durable, has high liquidity, industrial use. Gold is also a safe haven asset, etc. It is the fact that it is a safe haven asset that governments buy it and store it in their reserves, that does not count as 'validation' in my own opinion. They are utilizing its already existing qualities and not adding anything to it at all.

Im more on OP's side here. Gold without central banks would have a fraction of its current value. 20% of all (currently known and extracted) gold is held by Central Banks. That's an inmense chunk.

Thank you, this is the validation I'm talking about.

I really hope that never happens to Bitcoin and the Bitcoin holdings of government institutions stay under 10% (currently it's about 3-5%, depending on if you cound China's "alleged" holdings or not). (see also this thread).

For government not to own upto 20% in bitcoin as it is for gold, bitcoin must continue to be volatile in order for institutions not to rely on it.

And I think the big Central Bank gold holdings could even be a Damocles' sword in some distant future for its value. Gold is an almost totally unproductive asset, it only is valuable because there are no other assets with its qualities, mainly its rarity (industrial usage is negligible, jewelry is relevant but also only exists because it's "valuable"). But when gold is no longer needed as a Store-of-value because there are objectively better assets (I would count Bitcoin here, but we're still not there due to the speculative character of BTC) then its value could sharply decline. There could be a chain reaction: Central banks sell, gold crashes, retailers panic and sell their grandma's jewelry, and so on, until it deflates to its price justified by industrial usage, which is probably much less than 30% of the current price.

But we're far away from that. For now gold seems to have stabilized at 4700-4800 $. Still a very high price.

If gold continue to obey the political propaganda and be as volatile as bitcoin, it is already losing its advantage over bitcoin. So, for its safety, it has to stablize.

Bitcoin is imo indeed different because it has excellent qualities as "money" and in theory its value comes from usage, just like fiat currencies. It may be currently a little bit overvalued if we only take the current currency-like usage into account, but due to its potential future usage, it could be actually undervalued. Gold is somewhat censorship resistant but very difficult to use for payments.

But we all know that bitcoin has seriously shifted (but not totally) from being a currency to an asset, especially after the political US bitcoin reservation by Trump.

[Z-tight]

Im more on OP's side here. Gold without central banks would have a fraction of its current value. 20% of all (currently known and extracted) gold is held by Central Banks. That's an inmense chunk.

I know that. I know that's an immense chunk. And like i said earlier, there is a reason why central banks cannot help themselves but continue to buy gold, because it is a safe haven asset and they need it in their reserves to protect themselves from inflation, instability, crises, etc, if it should arise.

A lot of people would also argue that BTC wouldn't have reached $100k when it did, if Trump didn't somehow get involved or institutional investors through etf's. For the two assets, it is a case of institutions harnessing their existing qualities and it is only natural that the price would rise in reaction to that. I disagree with the idea of one being 'validated' by the government.

But we're far away from that.

We're not only far from that, we may never get to that. Simply because most of the points you raised are purely speculative, they may never happen. I see a future were gold and BTC both continue to thrive. Not were one dwindles and the other blossoms.

[BALIK]

Since the price of Bitcoin has fallen by about 40% from its ATH, perhaps there is so much criticism about the price of Bitcoin. To be honest, Bitcoin is not that stable yet. It is still affected by global politics and global context. But I can swear that Bitcoin is still a thousand times better than gold. No one is aware of the fixed supply of gold, so if for some reason the excess of gold increases at some point or if an alternative to gold is created, the price of gold will fall, but due to the fixed supply of Bitcoin and its decentralization, when it is added to the list of more people's preferences, it will be very stable and it will not be influenced by a single person.

Bitcoin's decline is nothing new, and that is not the reason some people criticize it. The real reason is that in the current tense political climate, many people expect Bitcoin to rise along with gold. But in reality, the opposite is happening, gold is rising and bitcoin is falling. This shows that the world still views it as a risky asset, rather than a safe haven.

In terms of supply, it is an important factor in assessing the potential of an asset, but it is not the only factor determining its value. We need to combine use case, practical application and needs, and the harsh reality is that gold is in greater demand than bitcoin.

Gold has been mined and used for over 5000 years, but as you can see, that only makes its value and market capitalization increase every day. Find another reason if you want to reduce the appeal of gold, supply will be inefficient 

[Bluedrem]

Bitcoin's decline is nothing new, and that is not the reason some people criticize it. The real reason is that in the current tense political climate, many people expect Bitcoin to rise along with gold. But in reality, the opposite is happening, gold is rising and bitcoin is falling. This shows that the world still views it as a risky asset, rather than a safe haven.

In terms of supply, it is an important factor in assessing the potential of an asset, but it is not the only factor determining its value. We need to combine use case, practical application and needs, and the harsh reality is that gold is in greater demand than bitcoin.

Gold has been mined and used for over 5000 years, but as you can see, that only makes its value and market capitalization increase every day.

The main reason why people today consider Bitcoin as risky may be the fact that some governments hold their own Bitcoin. In the current context, the turbulent situation in world politics can lead to war at any time. At this time, naturally every country will suffer financially and to compensate for that financial loss, they may want to sell their Bitcoins and if they sell Bitcoin, the price of Bitcoin will naturally decrease. People may have moved away from Bitcoin a little from this thinking at present. That is why I say that Bitcoin will increase the stability of Bitcoin with a small amount of money for a large number of people rather than a large amount of money held by a single person and gradually people will try to hold more and more of it.

[Dave1]

Since the price of Bitcoin has fallen by about 40% from its ATH, perhaps there is so much criticism about the price of Bitcoin. To be honest, Bitcoin is not that stable yet. It is still affected by global politics and global context. But I can swear that Bitcoin is still a thousand times better than gold. No one is aware of the fixed supply of gold, so if for some reason the excess of gold increases at some point or if an alternative to gold is created, the price of gold will fall, but due to the fixed supply of Bitcoin and its decentralization, when it is added to the list of more people's preferences, it will be very stable and it will not be influenced by a single person.

I will agree about the criticism if this is the first time that we have seen this kind of decline of like 40% or even higher. But it's not, we have seen it in the past that after a bull run, comes the bear market. So with that, the price will decline for the next 2 years before we can go back again.

So it will not be stable, it will remain volatile as it is Bitcoin's nature. And just like Bitcoin, in the last couple of days, even gold's price goes down hard. And at the current geo-political events, all other assets our going to be affected so I think everything is going to under perform, not just Bitcoin or crypto.

[Bluedrem]

I will agree about the criticism if this is the first time that we have seen this kind of decline of like 40% or even higher. But it's not, we have seen it in the past that after a bull run, comes the bear market. So with that, the price will decline for the next 2 years before we can go back again.

So it will not be stable, it will remain volatile as it is Bitcoin's nature. And just like Bitcoin, in the last couple of days, even gold's price goes down hard. And at the current geo-political events, all other assets our going to be affected so I think everything is going to under perform, not just Bitcoin or crypto.

Yes, I agree with you. But in a war situation, physical assets are hundreds of times safer than fiat currency. So instead of depositing fiat currency in the bank, ordinary people have decided to deposit gold or silver so that their assets are safe even if the value of fiat currency increases in any situation. If a country is involved in a war, naturally the cost of that country to wage war increases. To meet this additional cost, they use the assets in their reserves. In that case, if they are not able to convert to fiat currency, they decide to sell gold. And since some countries now hold Bitcoin in their reserves, if necessary, they may also sell Bitcoin and we know that if sales increase, the price will definitely decrease.

[Z-tight]

The main reason why people today consider Bitcoin as risky may be the fact that some governments hold their own Bitcoin.

What does this even mean? People consider BTC to be risky because it is volatile, because some of them are incapable of being their own bank, because they wrongly believe it is for tech-savvie people or younger folks, etc. These are some of the reasons some people don't buy BTC. Governments and institutions hold BTC, even though for the government most of it is confiscated, but that should not be a reason why someone wouldn't buy BTC.

and if they sell Bitcoin, the price of Bitcoin will naturally decrease.

The price of BTC has always been volatile, it rises and it falls, it is normal and nothing new.

[lornadane]

My inspiration to this post was drawn  from fillippone response to a thread.

So?  You considering lighting your bitcoin load?

Doesn't seem to be a good idea, even though you are surely free to make your allocation choices.

Lol.
NO.

Bitcoin is 1,000x better than gold.
I am not going to sell anytime soon.
I will keep stacking every possible satoshi.

My reflection is only about the unfolding of events. We have been fooled by Trump, who led us to believe the establishment of a Bitcoin Strategic Reserve was imminent.

The reality is that the imminent dedollarisation is not going to lead to an imminent Bitcoin Standard, but rather to a multi-decade-long fight between physical Gold and digital gold.
Bitcoin will emerge, but it will take time.
More time to stack SATs.

This made me check the bitcoin, silver and gold performance from 2023, which rather shows that gold is traying to catch up with bitcoin as against what many people thought that gold has outperformed bitcoin.
See the graph below;

image from bitcoinmagazine

My Conclusion
Bitcoin’s story from 2023 to 2026 was not about calmness, but about direction. It experienced sharp cycles, strong narratives and disappointment from political expectations. Unlike gold and silver, Bitcoin did not rely on institutions for validation. It got its strength from:

• A fixed and transparent supply
• Easy global transfer
• Self-custody without permission
• Increasing recognition as digital scarcity asset

While volatility tested confidence, Bitcoin continued to attract those willing to think in longer time frames rather than short-term price movements.
But the one big mistake we made was letting Trump fool us again after Elon did it years ago.

Be strong, hold, according to fillippone, bitcoin will eventually break through but it will take time.

fillippone’s comment is a reminder that narratives often run ahead of reality. Dedollarisation doesn’t mean an instant Bitcoin Standard. instead we’re likely facing a long period where gold and Bitcoin compete as stores of value.

Since 2023, gold hasn’t truly outperformed Bitcoin it’s been catching up, while Bitcoin moves in cycles driven by adoption not institutions.

Bitcoin’s core strengths remain its fixed supply, self-custody and global transferability. The mistake wasn’t volatility, but believing political promises would speed things up.

Bitcoin will break through—but it will take time. Stacking sats and patience matter more than hype.

[el kaka22]

Having a great year is not really that shocking and everything has that yearly big increase at times, stocks, metals, everything could have a good year. However long term sustained profit is the most important part. It  means that do you think if you hold gold for ten years or hold bitcoin for ten years and which one do you think you will make more money?

I personally believe bitcoin would be making me a lot more money and it wouldn't even be remotely close, it will be a lot more in bitcoins favour. This doesn't mean gold will have bad years, nor it means it won't make you profit, I am sure holding gold will make you profit but I just believe that bitcoin will return even better profits if you hold it same time frame.

[Fiatless]

The main reason why people today consider Bitcoin as risky may be the fact that some governments hold their own Bitcoin. In the current context, the turbulent situation in world politics can lead to war at any time. At this time, naturally every country will suffer financially and to compensate for that financial loss, they may want to sell their Bitcoins and if they sell Bitcoin, the price of Bitcoin will naturally decrease. People may have moved away from Bitcoin a little from this thinking at present. That is why I say that Bitcoin will increase the stability of Bitcoin with a small amount of money for a large number of people rather than a large amount of money held by a single person and gradually people will try to hold more and more of it.

Government hodling Bitcoin will even encourage people to invest in it because it would be seen as approval or support from the government. Some government also hold large amounts of gold.  Will you now conclude that people will avoid buying gold because they are scared of the government dumping part of its reserves during war. It is common for investors to diversify to assets with high returns. Gold and silver are gaining attention because of increase in price. Bitcoin's time will come in few years.

[d5000]

For government not to own upto 20% in bitcoin as it is for gold, bitcoin must continue to be volatile in order for institutions not to rely on it.

Not necessarily.

If Bitcoin becomes more stable, it can also provide the functions of fiat, at least partly. This would mean less fiat is needed, and central banks will need less "hard" assets to back it.

The "ideal scenario" for Bitcoin would be a scenario where Bitcoin is the "standard for everything", Fiat disappears almost completely, and Bitcoins will be held mostly by decentralized sidechain federations and Ark/Lightning providers to ensure scalability. Central banks would not need any reserves then. Governments may hold a separate treasury but it won't be as massive as today's Central Bank gold holdings. This is of course an utopia, but nearly all "realistic" positive Bitcoin scenarios would at least mean that central banks' importance would decrease.

In addition, when Bitcoin becomes more adopted, its price will grow and it will become more difficult even for Central Banks to acquire more than 10%. I can imagine a world with 10% of Bitcoins held by central banks, and it would be still okay, but 20% is a bit too much imo.

But we all know that bitcoin has seriously shifted (but not totally) from being a currency to an asset, especially after the political US bitcoin reservation by Trump.

Bitcoin as a SoV has not changed with Trump, it was a SoV or collectible since 2011. It's the lowering volatility that will make it more usable as a currency, and only if this value at least halves (roughly: not more than 30-40% both crashes and bull runs) then we'll see more currency usage. But then a massive network effect could appear, with merchants jumping on board en masse (profiting from lower transaction processing costs) and retailers following.

And like i said earlier, there is a reason why central banks cannot help themselves but continue to buy gold, because it is a safe haven asset and they need it in their reserves to protect themselves from inflation, instability, crises, etc, if it should arise.

There is no automatism in this, I think. There were long gold bear markets in history (1980-2000 comes into mind), and the next one is perhaps just around the corner. Some central banks will then be tempted to sell.

One of the reasons why gold is so high now is that instability is considered extreme in 2025/26, with an US president defying long established "norms" of diplomacy, and several major wars. The world could become an ugly one if this situation continues much more time.

A lot of people would also argue that BTC wouldn't have reached $100k when it did, if Trump didn't somehow get involved or institutional investors through etf's. For the two assets, it is a case of institutions harnessing their existing qualities and it is only natural that the price would rise in reaction to that. I disagree with the idea of one being 'validated' by the government.

I think indeed that the US government has "validated" Bitcoin a bit, although not decisively. It's far away from levels where it becomes dangerous to decentralization. In the case of gold however, any major central bank selloff would have drastic consequences probably. Of course that's speculative, but there is a striking logic behind such a chain reaction with gold shrinking largely to its industrial value. I think such a scenario could have a likelihood of about 10-20%.

We're not only far from that, we may never get to that. Simply because most of the points you raised are purely speculative, they may never happen. I see a future were gold and BTC both continue to thrive. Not were one dwindles and the other blossoms.

I see gold's long term future much more grim than Bitcoin's. Its qualities are mostly based on tradition, and that's not what is really needed in the 21th century. The most likely scenario is for me: once the dust of the current rally settles, gold's price could evolve mostly with purchasing power (i.e. growing in high inflation phases and shrinking with low inflation), but the 2025/26 rally could be the last one of its kind. Of course a WW3 or generally a even more unstable world would invalidate that scenario and give gold/precious metals more room to grow.