For many years, investors have been arguing if Bitcoin is better than gold. The leading cryptocurrency has long been dubbed “digital gold” because it has characteristics that many believe makes it a competitor or successor to the precious metal.
According to one investment analyst and podcaster, BTC is better than gold for the simple reason that Bitcoin has a fixed supply while gold does not.
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Why Bitcoin Is Better Than Gold
The analyst, Preston Pysh recently explained his rationale in an extensive Twitter thread.
“Earlier I wrote that gold “sorta” acts like a fixed supply money system. The reason it fails (relative to Bitcoin) is because there’s no difficulty adjustment for miners. If the price of gold continues to run higher (in nominal fiat terms) – which I expect – it creates a major incentive structure for miners to increase the production of gold being dropped into the market. Unlike gold, Bitcoin has a difficulty adjustment that regulates flow.”
Based on the extreme debasement that’s been occurring and that’s expected to continue, I would suggest adopting a new unit of measure. Although the world will continue to settle in dollars or other major fiat currencies, that doesn’t mean you should measure your growth in… 1/
— Preston Pysh (@PrestonPysh) October 16, 2020
This discussion has been brought up many times as investors realize that with there being much gold outside Earth, there may be a point where it will be mined en-masse and brought back to Earth, suppressing its price.
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BTC To Surpass Gold?
Analysts think that eventually, the market capitalization of Bitcoin will surmount that of gold as the cryptocurrency continues to prove itself on a macro scale.
Kraken co-founder and early Bitcoin adopter Jesse Powell told Bloomberg earlier this year that the leading cryptocurrency is likely to surpass gold’s market cap as people acknowledge BTC’s store of value characteristics. “People are flocking to it as a safe haven because of its finite, predictable supply. No one can print it,” he added.
Bitcoin “surpassing” gold would mean that each coin would be priced somewhere in the $450,000 to $500,000 range — 4,000% above current prices.
This sentiment has been echoed by Raoul Pal, CEO of Real Vision and a former hedge fund manager. He recently said that if the cryptocurrency market begins to encroach on traditional financial systems as he expects, BTC could peak above $10 trillion in terms of its market cap.
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Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com Analyst: Relative to Bitcoin, Gold "Fails" as a Store of Value