- Bitcoin, also known as “digital gold,” has outperformed gold every year since 2011.
- Given the large discrepancy in the market capitalization between bitcoin and gold, bitcoin has more potential to grow over the short to medium term than gold.
- So far into 2019, contrary to popular belief, bitcoin has failed to demonstrate the characteristics of a safe-haven asset.
According to OnChain Capital founder Ran NeuNer, bitcoin, sometimes described as “digital gold,” has outperformed the precious metal every year since 2011.
Since 2017, one ounce of gold started to be worth less than 1 BTC, following the spike of bitcoin from less than $4,000 to $20,000.
The bitcoin price is up well over twofold year-to-date against the U.S. dollar. | Source: coinmarketcap.com
Year-to-date, the bitcoin price has increased by more than twofold against the U.S. dollar while gold has risen from $1,282 to $1,514, by just over 18%.
Bitcoin can appeal to accredited investors
Given the large discrepancy in the market capitalization between bitcoin and gold, bitcoin has more potential to grow in value over the short to medium term than gold.
Recent estimates place the market cap of gold to be around $7.3 trillion while the market cap of bitcoin is hovering at around $166 billion.
However, bitcoin has a high level of liquidity in both the global cryptocurrency exchange and over-the-counter (OTC) market, with open interest on widely used margin trading platforms such as BitMEX nearing $1 billion.
Bitcoin has consistently outperformed gold, which tends to be stable throughout extended periods of time as a traditional safe-haven asset alongside bonds, likely due to the growing number of investors that acknowledge the potential of the asset to evolve into a major alternative store of value.