The debate between Bitcoin (BTC +1.27%) and gold has intensified in recent months and years. The dominant cryptocurrency, despite posting a jaw-dropping 17,210% trailing-10-year return (as of March 19), has lagged the precious metal on a shorter time frame. The price of an ounce of gold has skyrocketed 111% in the past 24 months.
Which of these unique assets will make you richer in the long run?
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Gold is seeing strong demand from central banks, like those in Poland, India, and Turkey, as buying has picked up over the past couple of years. These large pools of capital might be trying to lessen their dependence on U.S. Treasuries, for instance. Since gold has been viewed as a leading store of value for thousands of years, it has tremendous mental buy-in.
CRYPTO: BTC
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But the same concerns that market participants might have, like burgeoning amounts of government debt, ongoing geopolitical uncertainty, and potential weakening of U.S. dominance, play to Bitcoin's benefit. This is a digital asset that isn't controlled by a single entity. It's extremely scarce, with a hard supply cap of 21 million units. It's decentralized. And it lays the foundation for innovation to occur, as in payments or capital markets.
Bitcoin is much earlier in its adoption. Consequently, it has significantly more upside than gold and is likely to perform much better over the next decade and beyond.
