Why Gold is Beating Bitcoin in The Battle For Stores of Value

As global economies brace themselves for the potential impact of a trade war, investors are seeking safe haven in the time-tested store of value, gold.

As global economies are preparing for the potential impact of a trade war, investors are seeking safety in the time-tested store of value: gold.

On March 14, Gold reached the all-time high of $3,000 per ounce. The precious metal has seen a significant increase recently, adding 4.62% since the beginning of the month.

The recent gold rush isn’t limited to only investors. Last year, we reported how BRICS nations were expanding their gold reserves, and just last month U.S. President Donald Trump visited Fort Knox to inspect America’s gold stash.

There is a likely scenario where the recent fears of a potential recession due to the U.S. pressuring trading partners for better trade deals may further drive global uncertainty, prompting central banks and investors to fortify their holdings in gold as a hedge against economic instability.

Why Gold Is Beating Bitcoin In The Battle For Stores Of ValueBitcoin is often considered the premier store of value in the digital asset realm. With its strong use cases and scarcity, the world’s largest crypto is often seen as a safe haven among more volatile cryptocurrencies in the market.

However, the recent gold spike raises the question: Why is Bitcoin underperforming against another store of value?

Since February 3rd when Bitcoin started underperforming against gold, there’s hardly any competition. In that period, gold gained 8% in value while Bitcoin lost a whopping 18.11%.

While these results may seem disappointing for those who believe in Bitcoin as a hedge against inflation, it’s crucial to remember that comparing the two assets at this stage isn’t entirely fair.

Gold has a long history as a tested hedge against inflation, serving as a haven during the last century’s economic difficulties, and even as a de-facto currency before that. In contrast, Bitcoin is only 16 years old.

Of course, 16-year-olds are old enough to get a driver’s license in the U.S., but not yet of legal drinking age in most countries.

The digital asset still possesses the characteristics of a store of value, but it may need more time to mature and gain trust amid uncertain economic conditions. There’s even an argument to be made that in the long run, Bitcoin will become even scarcer than gold due to its limited 21 million coins, making it a rapidly increasing asset as demand grows and supply diminishes.