Bitcoin vs Gold: Which Is the Better Store of Value?

A remarkable event has occurred in the financial markets in 2025. It is the first time that bitcoin and gold together have become the top two highest-returning assets across main classes.

Figure: Gold (+28%) and Bitcoin (+26%) are now the top-performing major assets so far in 2025.

Bearish investors have been dumping the dollar, which has recorded its worst half-year performance since 1991, and placing their funds in both gold and bitcoin.

Source: visualcapitalist.com

Figure: Gold and Bitcoin asset class performance

As a result, gold is experiencing its best rally since 1979, with a price increase of approximately 40% in 2025, reaching a new all-time high of over $3,700.

Figure: Gold prices in 2025

In comparison, bitcoin started 2025 at an average price of just over $93,000, rising to an all-time high of over $124,000; an increase of over 30%.

Figure: Bitcoin prices in 2025

With both assets dominating long-term returns, there is no better time to discuss which of them is the better store of value in these turbulent times. Read on for a breakdown of both assets’ features — history and performance.

But first, a question. If you had invested just $100 in each a decade ago, what would this be worth right now in Fiat currency terms?

Well, we will be sharing the exact figures with you in this article.

How the US Federal Reserve affects the price of gold and bitcoin

The US Federal Reserve has just cut interest rates, ending its tightening cycle. This is potentially the first of a series of easing cycles that the Fed will undertake.

So, the Federal Reserve is essentially continuing its money printing, with M2 money supply increasing and reaching a new all-time high of over 22 trillion dollars in 2025.

Figure: The US M2 Money Supply has seen a dramatic increase, indicating a significant expansion of money in circulation. Source: St. Louis Fed

To understand why it matters, let us take a look back at history to help us understand why such actions by the Fed will continue to make gold and bitcoin the most valued safe haven assets.

Gold as a historical store of value

Firstly, let us look at the gold standard and the traditional financial system.

The gold standard is a system that binds monetary units to gold. Over half a century ago, most major global currencies were part of the gold standard. At the time, every coin and then note had its equivalent value in gold, because gold is a universally trusted asset.

Most major economies used gold to keep stable exchange rates, facilitating international trade. And also, precious metals formed countries’ monetary reserves. The more gold you had, the more confidence people had in your economy.

Then came the 20th century, a time of wars, the Great Depression, and great inflation. War-time spending and inflation stretched the gold standard to its breaking point, leading to Britain dropping it in 1931.

To establish an international stable exchange rate and create a new financial system following World War 2, 44 countries, led by the US and the UK, signed the 1944 Bretton Woods Agreement.

Figure: 1944 Bretton Woods Agreement

The US was in the best economic position during the post-war rebuilding period in Europe. As a result, the members voted to fix their exchange rates to the US dollar, making the dollar the world’s reserve currency. This action was achieved by pegging the dollar to gold at a rate of $35 per ounce of gold.

And so, a new international monetary system was born, with paper dollars now being seen “as good as gold.” However, in the 1960s and 1970s, the US struggled with high inflation and rising debt, with another war to fund in Vietnam.

Major world governments then lost some confidence in the dollar, demanding gold instead of dollars in trade. Soon, there was essentially a run on the US’s gold reserves, and, as a result, in August 1971, President Richard Nixon ended the dollar’s convertibility to gold, ending the gold standard and Bretton Woods Agreement.

Figure: President Richard Nixon announcing the end of the dollar’s convertibility to gold

Nixon’s decision marked the beginning of the fiat money era, with the dollar’s value thereafter being based on trust in the US government rather than being directly backed by gold. As a result, today, the Federal Reserve can just print dollars without needing the gold reserves as backup.

Rapid dollar issuance is the reason why assets like gold and bitcoin outperform Fiat currencies so much.

Figure: This is a graph of the loss of purchasing power of the dollar

The cost of inflation

Today, the dollar has lost over 96% of its value since the Fed assumed its management in 1913. What this means is that any money held in dollars or Fiat currency is losing its purchasing power constantly.

Why? Because of inflation and the creation or printing of dollars at low cost, with nothing backing it anymore. And when the US runs deficits or spends more than it earns, it finances its debts by simply issuing more dollars, creating a downward spiral into debt.

The US debt burden is quite insurmountable at this stage, as evident from the US debt standing at over $ 36.2 trillion, which is approximately 120% of US GDP. Therefore, it is unlikely that the country will grow its way out of this debt.

Figure: US Total public debt

Let us now link this back to assets like gold and bitcoin, because, despite all this, the world does still demand dollars for trade and reserves.

So, the Fed has cut its benchmark lending rate by 0.25 per cent to support its economy. This information is important because lower interest rates mean that your cash savings yield is lower.

Unless you protect your wealth against inflation by diversifying your holdings into growing assets, such as stocks, your cash holdings will continue to lose their value.

The good news is that falling rates are beneficial for bitcoin and gold, and therefore for those who own them as well. This is to say that both assets gain more appeal among investors when interest rates decline, as a low-yield environment lowers the opportunity cost.

Why gold is a classic safe haven asset

Gold is rare

What are the advantages of gold, and why would you consider investing in it? Well, here’s an interesting fact: miners have unearthed about 244,000 metric tonnes of gold to date.

If you compare that to the 1.74 million metric tonnes of silver mined till now, you can see why gold is special. It is rare. There are only about 50,000 tonnes more underground awaiting excavation.

Therefore, gold will continue to enjoy steady demand while simultaneously displaying long-term, persistent market performance due to its scarcity. That is, unless we extract more from deep-sea mining or outer space.

The scarcity and, therefore, inherent value of both gold and bitcoin have made them a universally accepted store of value that investors use to hedge against inflation generally.

Gold is also relatively liquid.

Gold is also relatively liquid because its market has a $163 billion daily trading volume. Its overall market size is a huge $5.1 trillion, and its derivatives market size is over $1 trillion.

There are other ways to invest in gold.

Also, you can invest your capital in the top gold exchange-traded funds easily, with gold ETFs offering a low-risk, highly liquid investment in gold.

To add to that, ETFs are backed by gold or gold-related business shares, which means that when you purchase a gold ETF, you offload physical bullion storage costs and risks to a counterparty. You can just buy, then sit back and enjoy the market’s upsides.

Alternatively, you can invest in tokenised gold, which is actual physical gold that is represented by a digital token on a blockchain. For example, there are tokens like PAXG from Paxos, which are crypto assets whose value is equal to a fixed amount of gold.

In the case of PAXG, one PAXG token is the equivalent of one fine troy ounce of gold, which is stored in vaults in London.

Then, with gold-backed crypto assets, you can buy, sell, and transfer your virtual gold instantly online, 24/7. Put simply, they are gold ownership made digital and easy to trade. These options are good if you like gold or bitcoin, but do not want to own them physically.

You do not have to hold either in a vault or a wallet. Instead, you can invest in a gold or bitcoin ETF that tracks the spot price of the asset.

Why Bitcoin is digital gold

Source: river.com

Figure: Gold vs Bitcoin: Real and projected supply

Bitcoin is rare

Let’s look at why bitcoin might be the asset to invest in compared to gold. First, bitcoin is the world’s largest cryptocurrency, with a market cap size currently of well over 2 trillion dollars.

It is the most secure cryptocurrency with its decentralisation and cryptographic security proving itself over time. Also, like gold, it is scarce, but even scarcer than gold, because gold’s total supply is unknown and could potentially increase with discoveries, whereas only 21 million BTC will ever exist.

Digital miners have mined over 19.9 million BTC, which is nearly 95% of the total supply. So, there is just over 1 million BTC left to be mined and added to the current supply.

Figure: how many bitcoin there are

Bitcoin is deflationary

Source: river.com

Figure: Bitcoin issuance schedule

The most important thing is that, while central banks can expand fiat supply at will, bitcoin’s supply is capped and systematically reduced, making it more resistant to devaluation.

As a result, miners may mine the last satoshi in about 2140 due to Bitcoin’s mathematically fixed distribution schedule. The Bitcoin halving event ensures that the supply of new bitcoin decreases predictably over time.

Then, its decentralised governance system ensures that any government or central authority cannot alter its value and quantity. Doing so protects its value from inflationary pressures.

Gold’s supply increases by a relatively stable 1.7% per year, whereas bitcoin’s new supply rate is programmed to decrease by 50% every four years, a process known as halving. Therefore, bitcoin has a continual and transparent decline in its inflation.

To add to its scarcity, about 14 to 18% of its existing 93% total supply has been lost to the ether. These losses are due to factors such as poor storage on broken hard drives, lost passwords, and lost wallets.

Trezor Wallet

The blockchain is immutable, so once access is lost, there is no “reset password” option — those coins are often lost forever. Therefore, best practice is to use hardware wallets and cold storage devices, such as Trezor, that store your private keys offline.

Offline storage safeguards your assets from hackers, viruses, and phishing attacks. It also gives you full ownership and control of your crypto.

It is also advisable to protect your seed phrase and store it online, with Cryptotag, the number one best-selling crypto seed phrase storage firm.

Bitcoin is a medium of exchange

Additionally, unlike gold, which lacks a robust monetary network, you can send and receive bitcoin from anywhere in the world, at any time. It is, therefore, a better medium of exchange.

So, basically, it is easier to transact with BTC in an economy of billions of people than it is to transact in gold bullion.

Even better is that you can trade bitcoin in a much freer market than gold, because it is easier for an individual to store and hold bitcoin than it is gold. So, bitcoin is not necessarily just owned by the rich and third parties like central banks.

Bitcoin is an advancing technology

A common question we often hear is, “Isn’t bitcoin very young compared to gold?” Well, yes, it is.

That said, it took the email, for example, less than a decade to drastically lower the frequency and use of physical posts.

Time and time again, history has proven that we cannot stand in the way of technology. The growth of and demand for bitcoin is undeniable, with large institutions now holding it on their balance sheets.

In addition to that, more governments could become significant buyers of bitcoin, with US states such as New Hampshire, Arizona, and Texas establishing foundational rules for BTC reserves.

Figure: New Hampshire, Arizona, and Texas establishing foundational rules for BTC reserves

So, Bitcoin vs Gold, which one is a better store of value?

So, when you compare the performance of gold vs bitcoin. Which performs better?

Well, no other financial instrument has outperformed bitcoin, also known as digital gold.

Then, to answer the question we posed at the top of this article, if you had $100 in gold 10 years ago, today it might be worth about $320. However, if you had the opportunity to invest $100 in bitcoin 10 years ago, you would be worth about $50,100 today.

So, you can see the difference.

But, besides the price, there are significant reasons why bitcoin is set to be the safe-haven asset of the future. First, gold is notoriously difficult to store and move, whereas you can take your BTC across any border, safely protected by your Trezor wallet.

You can also send your satoshis to any part of the globe much quicker and at significantly lower transaction fees compared to the cost of moving gold.

Second, gold is not as divisible as bitcoin. It is very difficult to pay for your coffee or travel with your gold. In contrast, bitcoin is modern money because it is divisible to the satoshi level, with there being 100 million satoshis to each bitcoin, perfect for microtransactions.

Figure: BTC division to satoshis

However, a $5 coffee purchased today with bitcoin could be worth $50 in the future. So, bitcoin is better suited for long-term holding, not a morning latte.

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Returning to bitcoin, you do not need a large amount of capital to invest in it, given its divisibility. You can save your satoshis and build your crypto portfolio.

You can use CoinStats, the leading cryptocurrency and bitcoin portfolio tracker, to track and stay up-to-date with your crypto investments.

Yield generation

Now, let us examine the passive income potential of both bitcoin and gold. You can generate small returns on your bitcoin through DeFi yield farming, staking, or crypto lending platforms.

And can physical gold earn interest? Yes, it can, although it is not that common. You can lend your gold to lending platforms for a return, which, for example, loans it out to gold businesses like jewellers or traders, and then pays you interest.

However, you will want to weigh up the risks of earning interest versus the amount of returns you receive. The reason is that your assets will often be exposed to counterparty risks, like defaults or security flaws.

Bitcoin vs gold returns

So, where should you invest right now? Well, when you look back at the past 15 years or so, gold has increased by about 250 to 300%

Figure: Gold price graph

The price of bitcoin, on the other hand, has increased so much more than this, at over 85 and a half thousand percent since 2013, according to Coin Gecko.

Figure: bitcoin price chart

So, when it comes to the best store of value debate, gold may be the trusted classic, but bitcoin is fast proving itself as the digital gold of the future.

Gold shines with stability, while bitcoin brings innovation, portability, and massive long-term potential due to the various demand and supply dimensions.

Do we have a clear bitcoin vs gold long-term investment winner? Well, that depends on your goals — safety with gold or safety and growth with bitcoin?

However, it is essential to note that bitcoin’s volatility is slowing down slightly. As it does, it will continue to capture a larger share of gold’s market as an alternative store of value. Then, ultimately, gold and bitcoin appeal to different types of investors.

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