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Bitcoin vs Gold: The Fight for Long-Term Investors


With the establishment of crypto assets, one question is becoming more and more common: Bitcoin vs gold, what is the better investment? Since its all-time high in 2017, bitcoin has begun to increasingly compete with classic assets. However, with the bear market still in full force for over a year now, crypto investors are increasingly turning to gold again. Since November, gold is on the rise, while the bitcoin price continues to fall and still hasn’t found its bottom yet.

Bitcoin vs gold: Which asset performs better?

That bitcoin is becoming increasingly more popular as a long-term investment has also been confirmed in mid-November 2018. Back then, former US Congressman Ron Paul launched a Twitter poll to find out what’s the most popular long-term investment. In the survey, he asked users if they would invest $ 10,000 in bitcoin, gold, US government bonds or cash if they had to hold their asset of choice for over 10 years. Bitcoin turned out to be the clear winner of the duel bitcoin vs gold at that time. After all, despite the bear market, as many as 50% of the 100,000 participants still wanted to invest their money in the cryptocurrency over the long term. A classic long-term investment in gold received only 37% of the votes and ended up in the second place.

At the same time, however, this trend had already begun to reverse. With the US authorities closing and speculation arising that the FED may soon lower or at least freeze interest rates again, the dollar steadily depreciated in the last two months of 2018. Unlike gold, bitcoin did not benefit from this development. One day after the price of gold had risen to nearly $ 1,200, the bitcoin price dropped below $ 6,000. Until January 4, the price of gold jumped further to $ 1,300 while bitcoin continued its decline.

As you can see, the price development of the two assets seems to have a negative correlation. If the bitcoin price rises, a fall in the price of gold can be observed. Similarly, if the gold price rises, investors should expect a fall in the bitcoin price. With a 90-day correlation coefficient of the two asset prices of -0.593, the statistics have confirmed this as well.

Bitcoin’s downtrend makes investors run for the hills

The bitcoin price, which has fluctuated reliably between $ 3,500 and $ 3,800 over the last few weeks, has now even broken through the $ 3,500 mark, which had previously served as an important support. At the time of writing, the current bitcoin price is $ 3,457 according to CoinMarketCap.

Bitcoin vs gold
The current bitcoin price according to CoinMarketCap

What the new low might mean for the future is dividing the opinions of the analysts. Mark Dow, a crypto-pessimist, recalled a similar case on January 27, when the bitcoin price had remained stable for weeks. At that time, the bitcoin course bravely held a price of $ 6,500, followed by a steep decline. ” Based on the pattern[,] odds are we get a similarly sharp drop again soon,”  he said on Twitter. “may even have started tonight.”

However, experienced analyst at eToro, Mati Greenspan, disagrees. In his market commentary for Business Insider, he pointed out that the bitcoin price has still not broken out of the larger $ 3,000- $ 5,000 range. Since the price has been traded in this range since November 2018, “there’s no need for overreaction here.”

In any case, starting February 2nd, it will officially be the longest bear market in bitcoin’s 10-year history. And so far, there is no end in sight.

Gold is the # 1 investment of bitcoin investors

No wonder then, that long-term investors are starting to get cold feet and that traditional assets like gold are becoming increasingly more attractive again.

This development has also been observed by Jan Van Eck, CEO of the investment company VanEck Associates. A Twitter survey of his Director of Digital Assets Strategy, Gabor Gurbacs, has delivered the confirmation. On January 20, he asked Twitter users what future investments they were planning, apart from bitcoin and other digital assets. The clear winner of the survey was gold, in which 41% of users wanted to invest.

Van Eck sees the resurging interest of investors in classic long-term investments in gold as a correction of the trend since 2017. After all, at the time of the crypto-boom, more and more long-term investors had turned to bitcoin while gold seemed to be forgotten. “I do think that bitcoin pulled a little bit of demand away from gold in 2017,” Van Eck told CNBC. “Interestingly, we just polled 4,000 bitcoin investors. And their No. 1 investment for 2019 is actually gold. So gold lost to bitcoin [before], and now it’s going the other way. “

Tim Seymour, founder of Seymour Asset Management, believes that bitcoin has sucked the life energy out of the gold market in 2017 as well. At the same time, he is reminding investors of the limits of the volatile cryptocurrency as a long-term investment, which he does not regard as a reliable store of value. “Truly outside of the existential blockchain argument, it’s been very difficult to argue [that bitcoin is a] store of value. Gold is a store of value, and there’s no disputing that.”

Your opinion counts!

What do you think about the bitcoin vs gold debate? What’s the better long-term investment? Is bitcoin a serious alternative to traditional investment options like gold? We look forward to reading your thoughts in the comments below.


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Janine is a professional crypto reporter with a fascination for the potential of cryptocurrencies (which she discovered back in 2013) and a passion for discussing social phaenomena and societal changes. When she is not sitting in front of her computer, she can be found walking her aussie or reading one of the novels by Dan Brown.