With Bitcoin (BTC +0.40%) trading 51% below its record from October last year (as of June 23), it's extremely challenging for investors to be bullish in the current bear market. However, I believe it's still a good idea to remain optimistic in the long run.
It is estimated that the market value of all above-ground gold reserves is $28.9 trillion. This is more than 22 times greater than Bitcoin's market cap of $1.3 trillion. The top cryptocurrency will eventually catch up to the precious metal. It's only a matter of time.
I predict that Bitcoin will be worth more than gold in 20 years. Here's why.
Image source: Getty Images.
The crypto is superior in many aspects
If we look at Bitcoin and gold with a side-by-side comparison, it's clear that the cryptocurrency is superior. This is true on multiple fronts.
There is financial infrastructure in place that allows people to buy things from merchants using Bitcoin. Those transactions can't be completed with gold.
Using a 12- or 24-word recovery phase, people can essentially store their Bitcoin in their heads. This makes it unbelievably portable across the globe. Because it's too heavy to move, gold is burdensome to transport long distances.
A single Bitcoin unit is divisible into 100 million satoshis. Gold can be broken down, but only by melting it to a desired weight.
And of course, Bitcoin is scarcer. There will only be 21 million units of the cryptocurrency in circulation, a hard cap that's enforced by the network's stakeholders, and consistent halving events. Gold's supply expanded by 1.75% in 2024, higher than Bitcoin's 1.1% inflation rate that year.
There is one area where gold has a clear edge. It has been viewed as a store of value for thousands of years. It wins in the longevity department. Being less than 20 years old, Bitcoin is a baby compared to the precious metal.
CRYPTO: BTC
Key Data Points
Digital capital for a digital world
There's one characteristic of Bitcoin that hasn't been discussed yet. This is a purely digital form of capital. Gold, on the other hand, is not. This puts the cryptocurrency in a favorable position given the evolution of the global economy.
In the past couple of decades, investors have seen how much the internet has completely changed our society. And now, we are at the beginning of what's shaping up to be an artificial intelligence-led secular shift. There's a very high probability that the world will become more digital in 20 years.
That belief should then lead you to have confidence that Bitcoin will gain greater adoption at the expense of gold. If autonomous agents become economic actors, it makes sense that they would choose a neutral, transparent, and scarce form of money. All signs point to Bitcoin.
