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3 reasons why Bitcoin will outperform gold in 2021

Photo of: Joseph Stone
by Joseph Stone

Bitcoin is often compared to Gold. Gold is still the benchmark as a store of value because it has a much older history and a more stable price. However, Bitcoin has some major advantages compared to the precious metal, here are 3 of them.

1. Storage

Physical gold is a safe asset, but it is complicated to store.
1st option: you store it at home. You need a great hiding place, and the more you have, the more complicated it is to hide.
2nd option: you put it in a safe deposit box or in management and this generates significant costs.
For Bitcoin, storage is simpler since it is on a digital asset. No matter how many Bitcoins you have, you just need to keep your private key that gives you access to your Bitcoins. No associated fees.

2. Capitalization

Currently the capitalization of Gold is significantly higher than that of Bitcoin. Bitcoin’s capitalization is close to $450 billion when gold is at $9 trillion. Globally, gold has a capitalization 20 times greater than that of Bitcoin. It would take a Bitcoin at $450,000 per unit for its capitalization to match that of gold. We’re still a long way from that and that’s good, it shows that there is still enormous room for improvement for this asset. Bitcoin is still at the beginning of its epic.

3. The new generation

On the one hand, gold is not “modern”, it is an asset that has existed since the dawn of time. On the other hand, we have young people who are now ultra-connected and who live in a digital world that has to react at a moment’s notice. We are in a consumer society that pushes us to have everything, right away.
Bitcoin fits perfectly into this type of dynamic society, and is therefore clearly able to meet) the demand of the new generations.

This could be totally wrong of course, no one can predict the future but I can well imagine that gold will remain an asset valued by the older generations for its role as a store of value, but I am convinced that the trendy asset will be Bitcoin because it will be more accessible, more modern and more liquid!

The years to come will give us the answer to this hypothesis, but what is certain is that Bitcoin still has a huge room for improvement and is increasingly recognized as a “credible” asset within institutions.