Is bitcoin replacing gold?
The bitcoin price has more than doubled this year, but gold has disappointed.
Bitcoin has hit a new record high above $64,000 (£46,700). But while bitcoin has more than doubled this year, gold has disappointed, notes John Authers on Bloomberg. That’s odd given the “historic amount of money printing” and talk of coming inflation. Dhaval Joshi of BCA Research thinks bitcoin has stolen gold’s thunder by emerging as a new “anti-fiat” asset: investors looking for protection against inflation increasingly turn to digital currencies. “Circumstantial” evidence suggests that some of the money that big investment institutions have pulled out of gold since last November may have flowed into the cryptocurrency. Yet bitcoin’s high volatility and periodic crushing losses are hardly the hallmarks of a store of value.
Bitcoin’s $1trn market cap is still smaller than the $2.5trn of privately held gold, says Daren Fonda in Barron’s. Bitcoin would have to hit $146,000 for the market capitalisation to match that of gold. But will governments really tolerate a “freewheeling digital token” that undermines their own currencies? China has already stopped banks from making transactions in bitcoin and closed down crypto-exchanges, while India is contemplating an outright ban. Stock prices ultimately depend on earnings and gold has applications in manufacturing and jewellery. Yet bitcoin’s value is purely speculative: as long as people believe it can one day supplant the dollar or gold they will keep on buying.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
IMF suggests “refinements” to Rachel Reeves’s fiscal rules
The IMF has upgraded the UK’s growth forecast but wants Reeves to refine her fiscal rules to avoid unnecessary spending cuts or tax rises
-
Invest like a tortoise, not a hare to avoid market volatility
Opinion Hassan Raza, Portfolio Manager at CG Asset Management, highlights three favourite investment companies
-
Investment opportunities in the world of Coca-Cola
There is far more to Coca-Cola than just one giant firm. The companies that bottle and distribute the ubiquitous soft drink are promising investments in their own right.
-
Streaming services are the new magic money tree for investors – but for how long?
Opinion Streaming services are in full bloom and laden with profits, but beware – winter is coming, warns Matthew Lynn
-
'Pension funds shouldn't be pushed into private equity sector'
Opinion The private-equity party is over, so don't push pension funds into the sector, says Merryn Somerset Webb.
-
Greg Abel: Warren Buffett’s heir takes the throne
Greg Abel is considered a safe pair of hands as he takes centre stage at Berkshire Hathaway. But he arrives after one of the hardest acts to follow in investment history, Warren Buffett. Can he thrive?
-
Who will be the next Warren Buffett?
Opinion There won’t be another Warren Buffett. Times have changed, and the opportunities are no longer there, says Matthew Lynn.
-
Will Comstock crash – or soar?
Opinion The upside for Comstock, a solar panel-recycling and biomass-refining group, dwarfs the downside, says Dominic Frisby.
-
'As AGMs go digital, firms must offer a new form of scrutiny for shareholders'
Opinion Technology has rendered big AGM meet-ups obsolete, but the board still needs to be held to account, says Matthew Lynn
-
Unilever braces for inflation amid tariff uncertainty – what does it mean for investors?
Consumer-goods giant Unilever has made steady progress simplifying its operations. Will tariffs now cause turbulence?