Bitcoin vs Gold: differences and similarities

Bitcoin vs Gold: differences and similarities

Bitcoin is sometimes said to be “digital gold”. And on the surface at least, the two have some things in common, notes Kanish Chugh, Head of Distribution at ETF Securities.

“Both have finite supply. Both are stores of value. Both are seen as currencies without governments.

“But the two are also very different.

“Gold has a much longer history than bitcoin. It has been used in financial systems for millennia. As coinage in ancient Egypt and China’s Ming dynasty, to the gold standard and modern ETFs. Empires come and go, yet gold always remains.

“Gold is significantly less volatile than bitcoin. Gold’s historically low volatility has meant that it is classed as a “safe haven”. While bitcoin’s high volatility has mostly been upwards, meaning it has outperformed gold.

“Gold is also more regulated. Gold mostly trades in London under the supervision of the Bank of England. While bitcoin mostly trades on unregulated crypto exchanges.”

These differences mean there is room in portfolios for both – if investors are so inclined. For those interested in comparing gold and crypto, please see our comparison table below, he notes.