Bitcoin (BTC) is projected to surpass gold in value over the long term, and holders of BTC are advised not to exchange their coins for gold, even as gold prices soar beyond $4,000 per ounce. This perspective comes from Matthew Kratter, a well-known Bitcoin advocate, educator, and market analyst.
Kratter highlights that Bitcoin offers superior qualities as a store of value due to its scarcity, ease of transferability, verifiability, divisibility, and other monetary attributes. He explains:
“Gold’s supply has been increasing at an annual rate between 1% and 2% for many decades—possibly centuries. While this growth might seem minimal at first glance, it inevitably results in the doubling of gold reserves approximately every 47 years.”
The gradual rise in gold availability can be further intensified by unexpected discoveries of large deposits both beneath the Earth’s surface and even in space.
Historically speaking, Kratter points out that the massive influx of new gold into Europe from the Americas during the 16th century led to severe inflationary pressures which ultimately contributed to the collapse of Spanish and Portuguese empires.
The debate among market experts continues regarding whether BTC or gold serves better as a store of value or medium for exchange. Proponents of Bitcoin argue it represents an evolutionary leap forward in money’s development; meanwhile, gold enthusiasts contend that Bitcoin remains too volatile and immature to fulfill such roles reliably.
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The Limitations Of Gold In A Digital Economy
“Transporting large quantities of physical gold is costly due to shipping expenses and insurance requirements,” Kratter notes. “This makes it inefficient for settling trade imbalances.”
Navigating airports or other highly monitored locations with even small amounts poses significant challenges—moving substantial volumes becomes nearly impossible.
Because physical characteristics restrict its use within digital finance systems or online transactions, gold is fundamentally unsuited for modern financial infrastructures where rapid digital transfers dominate.
Moreover, tokenized gold—which involves representing actual bullion held by custodians on blockchain platforms—introduces additional risks related to trustworthiness:
- The issuer could create more tokens than there are physical reserves backing them;
- The custodian might refuse redemption requests converting tokens back into tangible metal;
- Possible government seizure threatens stored physical assets behind these tokens.
A Comparison Between Spot Bitcoin And Physical Gold Characteristics
(Source: Cointelegraph)
This fundamental inability — a core limitation inherent only within tangible assets like precious metals — makes cryptocurrencies like BTC far more adaptable when transferring wealth across borders instantly via internet networks without intermediaries or excessive risk exposure.