Will Bitcoin Displace Gold as the Universal Store of Value?

Gold has won the competition — a plebiscite as long-running as established civilizations — to be crowned mankind’s universal choice as a store of value and medium of exchange — as real money. Now, in less than two decades, a potential competitor has arisen: Bitcoin, with the arguable potential to rival and even supersede gold.

MicroStrategy CEO Michael J. Saylor asserts that Bitcoin will “displace gold as a non-governmental store of value” and describes it as “the apex property of the human race.”

To be as emphatic as possible, he added: “Bitcoin is digital gold. It’s a million times better than gold, and there’s no reason why anybody wouldn’t want to use it as a store of value over time.” And in an abrupt policy shift, President Donald Trump, until recently a vocal skeptic of cryptocurrencies, signed an executive order setting up a US Bitcoin reserve. It will comprise some 200,000 bitcoins confiscated in various criminal proceedings, positioning it as a “digital Fort Knox” — a move toward anointing Bitcoin a strategic asset.

For good measure, the Kingdom of Bhutan will be engaging in Bitcoin mining using its plentiful hydroelectric resources. In essence, Bhutan will convert waterpower into Bitcoin, pulling off a feat that would impress the alchemists of old, becoming one of the first nations to adopt Bitcoin at the national level. Both developments highlight the burgeoning recognition of Bitcoin’s potential to serve as a store of value comparable to gold.

El Salvador President Nayib Bukeles's administration made the case for making Bitcoin legal tender, suggesting it could function as a medium of exchange and “bring financial inclusion, investment, tourism, innovation, and economic development to our country.”

“We believe Bitcoin disrupts gold. We think it’s a better gold if you look at the properties of money. And what makes gold gold? Scarcity. Bitcoin is actually fixed in supply, so it’s better than scarce… It’s more portable, it’s more fungible, it’s more durable. It sort of equals a better gold across the board,” says Tyler Winklevoss, co-founder of Gemini Exchange.

Gold’s Career: A Few Highlights

The first gold coins, as far as we know, were minted by the Lydian civilization around 600 B.C.. Gold and silver, of course, were currency, plain and simple, in ancient Egypt, Persia, Greece, and Rome, among other empires. During the late Middle Ages, gold became indispensable to commerce, particularly in the vast network of trade fairs that connected Europe’s growing economies.

These fairs, held in cities such as Champagne and Bruges, served as hubs where merchants from across the continent settled debts and negotiated long-distance trade agreements. Gold and silver coins were primary instruments of settlement. Florentine silk merchants trading with Flemish cloth producers did not rely on local currencies, prone to debasement by monarchs desperate to pay for their wares. Instead, they would carry gold florins or Venetian ducats, much more broadly recognized and accepted units of gold. The bullion trade underpinned medieval finance, with leading merchant banking families such as the Medici ensuring that gold moved safely between regions through bills of exchange. While these early forms of banking instruments reduced the need for physical transfer, ultimately, settlements still required access to gold.

In the early modern period, the influx of gold and silver into Spain and Portugal from Latin America fueled a historically rare inflation (increase in the money supply) but also global commerce, reinforcing bullion’s significance in trade networks stretching from Europe to China. By the late seventeenth century, gold had become the foundation of European monetary systems. The Bank of England, established in 1694, went far toward formalizing the gold standard, anchoring its currency to gold reserves — although parliament fought over early schemes for paper money and fractional reserves.

The United States, already formally on a bimetallic (gold and silver) standard, switched to gold de facto in 1834 and de jure in 1900 when Congress passed the Gold Standard Act. The system ensured that every dollar in circulation was backed by a fixed amount of gold, reinforcing confidence in the currency. The gold standard of the nineteenth century further institutionalized the metal’s reputation as a stabilizing force in finance. As economist Milton Friedman noted, inflation was virtually nonexistent during this time because gold’s supply increased only gradually, preventing the excessive creation of money. This framework dominated global trade and economic policy until World War I, when the demands of war led many nations to abandon the gold standard in favor of fiat money.

It was only in the twentieth century, however, that governments severed the link between money and gold. In 1933, President Franklin D. Roosevelt ended the direct convertibility of dollars to gold for U.S. citizens. The Bret