Since its inception, Bitcoin has drawn comparisons as an alternative to gold: It is mined, there’s a limited amount of it available, it’s increasingly precious, and it offers an alternative to the fiat money produced by central banks as witnessed when people in Greece and Argentina began piling into Bitcoin during respective political crises.
There’s also the issue that both are seen as alternative investment classes whose prices have the potential to grow significantly if bought at the right time in their cycle. They’re both highly liquid and a good way to store value (for the most part) without having to pay taxes (unless you’re holding Bitcoin in the US, where the IRS has said that it wants its share).
In fact, there are increasing parallels between Bitcoin and gold as times goes on. For example, the indian government cracked down on gold imports in 2016, and this was followed by a similar crackdown on Bitcoin just a few months later. Both were seen as threats to the country’s standard currency, the rupee.
Therefore, it’s understandable that the question should arise, “should I go with gold or Bitcoin?” or rather to ask whether the two are substitutes or complementary. Josh Crumb, founder of GoldMoney and a former commodities trader at Goldman Sachs says: “”I like bitcoin, particularly in the short-term, so it’s kind of like saying ‘Do you like gold or do you like investing in Facebook in 2011? To me, they’re two totally different things.”
The point is that framing Bitcoin as the rival to gold is erroneous; Bitcoin is an exciting asset class in its own right. The fact that it has several similarities with gold – including terminology – shouldn’t distract us from that reality. When looking at Bitcoin, it’s important to look at its own merits rather than convenient narratives. That advice…is golden.