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Bitcoin [BTC] is the new gold for modern-day investors, suggests Grayscale’s latest research

Arijit Sarkar

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Bitcoin [BTC] is the new gold for modern-day investors, suggests Grayscale's latest research
Credit: flickr


Bitcoin’s [BTC] entry into the financial market has finally been acknowledged by the world after a painfully long decade of proving its relevance. While recent conversation has revolved around the comparison between crypto (mainly BTC) and fiat, the crypto-ecosystem has forced the new generation of investors to re-evaluate the value of gold, in terms of wealth.

In order to better understand this shift, Grayscale’s latest research report was dedicated to understanding the mindset of the next generation of investors.

The report began with a modest argument aimed at comparing mankind’s mode of exchanging value, and how it has evolved, alongside changes in civilization. While it expanded on various aspects that determine the relevance of any currency, the report primarily focused on 7 areas, namely, scarcity, verifiability, durability, portability, divisibility, fungibility, and recognizability.

Consequentially, fiat currency played a crucial role in replacing gold as a far more convenient medium of exchange, despite the fact that investors still view gold as the ultimate store of value hedge against inflation. This is further evidenced by the strong relationship between the supply of “safe haven” currencies like the US Dollar and the price of Gold. In fact, the investment market for Gold has now ballooned to over $3.3 trillion, according to the World Gold Council.

GROWTH IN MONEY SUPPLY VS. GOLD PRICE

Source: Grayscale

The graph above shows Gold’s recent performance in maintaining value and providing returns to its investors. However, the report noted that as money and payment systems evolve, Bitcoin will continue to threaten and displace Gold as the ultimate monetary asset. The report further compared the utility and characteristics of Bitcoin and Gold, against the 7 factors highlighted above.

MONEY MARKET EFFICIENCY COMPARISON: BITCOIN VS. GOLD

Source: Grayscale

The report concluded with this comparison and stated,

“Bitcoin’s superior composition of “good money” qualities make it both a resilient store-of-value and an efficient medium-of-exchange. It is the new and improved “digital gold,” perfect for our interconnected, global economy.”





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