According to Bitcoin proponent, educator, and market analyst Matthew Kratter, the long-term price of Bitcoin (BTC) is expected to surpass that of gold. He advises BTC holders against selling their coins to invest in gold, particularly as it approaches prices exceeding $4,000 per ounce.
Kratter asserts that BTC serves as a superior store of value thanks to its characteristics such as scarcity, portability, verifiability, and divisibility said. He elaborated:
“Gold supplies have increased somewhere between 1-2% annually for decades, if not for centuries. Now, this may not seem like a lot, but it leads inevitably to gold supplies doubling every 47 years.”
The rising supply of gold could be further increased by sudden discoveries of substantial, untapped gold deposits, both on Earth and in outer space, Kratter noted.
He also pointed out that the influx of gold from the Americas to Europe in the 16th century led to the collapse of the Spanish and Portuguese empires, primarily due to inflation caused by the sudden availability of gold in massive quantities.
The debate continues among market analysts regarding whether gold or BTC serves as a better store of value and medium of exchange. Bitcoin advocates contend that BTC represents a natural evolution of money, while supporters of gold argue that Bitcoin remains too new and volatile to be considered a reliable store of value.
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Gold suffers from ancient problems and cannot be the monetary base in a digital world
“Shipping and insuring significant amounts of gold is quite costly, making it an inefficient means for settling trade imbalances,” Kratter explained.
Transferring even small quantities of gold through airports or other “heavily surveilled” areas is challenging, and moving larger amounts is “almost impossible,” according to him.
Kratter added that gold’s physical attributes hinder its suitability for online finance and digital transactions.
Gold cannot be transmitted over the internet, and tokenized gold—which consists of physical gold held by a financial custodian, represented on a blockchain—comes with counterparty risks, Kratter stated.
These risks involve potential issues such as the issuer creating more gold tokens than the physical gold available, refusing to redeem digital tokens for actual gold, or the risk of government confiscation of physical reserves, he mentioned.
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