For far too long now, Bitcoin has been given the tag of “digital gold,” with several proponents arguing that the asset could eventually surpass the value of precious metals due to its scarcity and decentralized nature.
This comparison initially seemed appropriate as both assets seem to serve as hedges against inflation, making them attractive to investors across the globe. Moreover, both assets have been prized for their resistance to government interference and their scarcity, naturally driving their prices upward as demand increases.
However, as we have moved through the years and finally entered 2025, continuing to compare the two seems to do both a major disservice — as there are now more fundamental differences than similarities between them.
The digital advantage is unmatched
Straight off the bat, the fact that Bitcoin is weightless, portable, and truly borderless gives it distinct advantages that physical gold simply cannot match. These aspects make the digital currency remarkably easy to own in substantial amounts and maintain self-custody. Furthermore, transfers can be executed immediately to anyone, anywhere in the world, without intermediaries or permission.
Also, unlike gold, Bitcoin’s supply is programmatically finite and cannot be altered or manipulated. While new sources of gold can be discovered and mined to increase supply, Bitcoin’s 21 million coin cap is immutable. Such algorithmic scarcity provides a level of certainty that gold simply cannot offer.
Lastly, the digital nature of Bitcoin offers extreme transparency and traceability, making it more difficult to manipulate than physical gold. Bitcoin cannot be counterfeited, while fake gold remains a persistent problem in markets worldwide. Perhaps most importantly, Bitcoin is upgradeable and can be improved over time — both in its core coding structure and in the ecosystem of applications and financial services that surround it.
Different assets, different roles
Even when considering each vehicle purely as an investment instrument, arguments for their equivalence don’t seem to hold up because while gold’s historical significance as a store of value has spanned several millennia, Bitcoin’s history has barely covered a decade and a half. Yet Bitcoin’s growing acceptance among institutional investors has revealed a fundamental shift in how wealth preservation is perceived in the digital age — something that is supported by the fact that BTC has easily outperformed gold throughout recent years.
Despite this, Bitcoin’s short-term volatility has continued to dominate its reputation, meaning it’s still not universally considered a safe-haven asset (except by committed long-term holders and enthusiasts). Interestingly, this volatility has been beneficial for the currency, as these fluctuations have kept BTC in the public eye in ways that gold simply isn’t.
That said, if Bitcoin were to truly become a safe-haven asset with qualities similar to gold, it needs to exhibit similarly flattened volatility patterns, with slow, steady price appreciation over long periods. But there’s little indication that investors want Bitcoin to mirror gold’s price patterns.
These ongoing discussions about Bitcoin versus gold haven’t been lost on cryptocurrency exchanges like VALR, which has processed over $10 billion in trading volume since its founding in 2018. As one of Africa’s largest cryptocurrency exchanges, VALR has recognized the importance of both assets by offering trading options for Bitcoin (alongside several other cryptos) and even gold-backed tokens (such as XAUT).
Moreover, VALR recently launched a month-long “BTC vs GOLD” trading competition which is scheduled to run up until March 27, 2025. As the name suggests, the competition centers around trading both Bitcoin and XAUT (a digital token backed by physical gold), providing an innovative way for traders to engage with both assets simultaneously.
The competition highlights the growing interest in understanding the relationship between these two distinct assets while offering substantial rewards — i.e. a total of $20,000 for top traders, with weekly reward pools of $5,000 have been set aside. Interested individuals can qualify by making spot trades of at least $20 or futures trades of at least $200 on eligible Bitcoin and XAUT pairs.
Lastly, with their institutional-grade platform serving more than 1,100 corporate and professional traders alongside over 1.2 million retail traders, VALR has created an environment where both traditional and digital assets can be traded efficiently.
Looking ahead
As the cryptocurrency ecosystem matures, there needs to be an emergence of new platforms that recognize the unique properties of both crypto and precious metals. In this regard, offerings like VALR — with their comprehensive product range which span spot trading, futures trading, and fiat on/off-ramps — stand to allow investors to engage with both asset classes as per their own needs.
