Bitcoin has often been called ‘digital gold.’ It’s become a common phrase which is often used to illustrate how Bitcoin is a ‘store of value.’ It’s also a rare commodity, similar to gold. Yet, despite these comparisons, Bitcoin has seldom followed gold’s price movements. The only real exception was recently when, amidst an escalating trade war, investors seemed to flock to both Bitcoin and gold. Both are clearly being seen as a hedge against chaos.

In the past week or so, however, Bitcoin has once again decoupled from gold and has dropped substantially from its local high. Still, according to trader @davthewave, gold and BTC may someday appreciate at the same rate. A simple chart below makes his case as to when this might happen.

Give it a few years, and gold and BTC might be appreciating at the same rate. pic.twitter.com/KEbO5vENkE

— dave the wave (@davthewave) August 16, 2019

According to this chart, gold and Bitcoin should begin appreciating at the same rate around 2048. This would also imply that both have a similar market capitalization, of course.

The situation is, understandably, a bit hard to believe. After all, the entire chart is ultimately based on both gold’s and Bitcoin’s USD valuation. Moreover, the chart does not include any inflationary pressure and that’s not to mention socio-political conditions which could just as easily impact price.

Overall, the comparison is inviting as a consideration but ultimately is foolish to follow as if destiny. Bitcoin surely may reach gold’s market capitalization someday, but we also have to realize that Bitcoin is far more precious than gold will ever be. Therefore, although Bitcoin mimics some of the functionality of the metal, we need to realize it is a different animal altogether.

Do you believe that Bitcoin could, someday, mirror gold’s rate of appreciation? Is the comparison nonsensical? Let us know your thoughts in the comments below. 

Buy and trade cryptocurrencies with a 100x multiplier on our partner exchange, StormGain.

Images are courtesy of Twitter, Shutterstock.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.