Is Bitcoin a better investment than Gold? That’s what we would like to know in the context of 2020. Our Founder Wincent and CEO Clement each bought 1,000 grams of Gold and the equivalent in fiat value for Bitcoin. The objective is to take this apple to apple comparison in fiat value and see which asset delivers the greater ROI by the end of 2020.
As of writing this article the current bid price for an ounce of Gold is US$1,748 and the current price of Bitcoin is US$9,729. Bitcoin is currently in the lead with a ∆ of +1.28% versus +0.22% for Gold in the past 24 hours. But it truly is too early to tell how things will play out over the next 7 months.
Gold & Bitcoin Starting Prices
Why is Bitcoin Called "Digital Gold"
Bitcoin is often referred to as “Digital Gold” primarily because of its scarcity as well as the fact that it’s the original cryptocurrency. It’s also worth noting that from a production standpoint, after Bitcoin’s halving last week to 6.25 BTC per block mined. The rewards for Bitcoin mining match the annual output production wise for Gold. This means that all things held equal, they have effectively the same scarcity (production wise).
The Gold Standard
The U.S government used to hold US$35 per ounce of Gold. You could literally go to a bank and exchange your fiat to gold coins. However, in August 15th 1971, Richard Nixon’s administration changed everything. They abandoned the gold standard for the current fiat monetary system we have today.
Is Bitcoin a better investment than Gold? With the last halving event just happening and the market showing bullish signs. We expect that in the next 7 months, Bitcoin will in fact be a better investment than Gold. We’ll be keeping track of the value for both and reporting our findings here. In 7 months we’ll have a clear picture for which store of value performed better.