
There have been some interesting fluctuations in the pricing moves of Bitcoin breaching US$ 30,000 recently. Some commenters have started to ask whether Bitcoin is the new Digital Gold.

Furthermore, well-known financial institutions have applied to the Securities & Exchange Commission to have Bitcoin spot-based Exchange Traded Funds (ETFs); this includes Ark Invest and Blackrock as the leading ones with others following.
Is Bitcoin an asset that is on par with gold and do you believe it is ‘worth its weight in gold’? Why is gold valuable in the first place? The answer to the relative price of any asset is supply vs demand. It does not matter whether the asset has shiny qualities or not; what matters is the perceptions of the buyers and sellers of that asset.
Gold only has value because as a society we believe it does; the same underpinnings give Bitcoin its value. Bitcoin has been called Digital Gold because it shares many of the same characteristics as gold. Both are scarce, fungible, and supposed to be resistant to censorship. Bitcoin is also decentralized, meaning it is not controlled by any government or financial institution.
Bitcoin is like gold in that it has become an alternative investment for some investors. It has the potential for many uses and can be a worthwhile investment if used in the right way. Bitcoin is rare compared to other cryptocurrencies and gold is rare compared to other metals. They are both rare in their respective categories.
Another perspective is the utilization; perhaps we can look at this from the perspective of inflation. In the case of both gold and Bitcoin there is confidence there is a finite amount mined and a finite amount unmined. If society believes in the utility of both these assets, they are likely to maintain their value and be hedges against inflation.
Censorship and liberty appear to be the most interesting objectives of Bitcoin from my perspective. Essentially, gold and Bitcoin are seen as insurance/hedges against the tyranny of government and its policies to control and impact your wealth by clicking a button.
However, for puritanical libertarians, I do not think Bitcoin could ever be money because power and politics are unlikely to allow this. The underlying technology for Bitcoin does not make it efficient to become a general currency and manage huge volumes of transactions in real-time. Herein lies my issue; whether you have gold bars or Bitcoin you will still need to convert to a fiat currency to facilitate the exchange of goods, services and other assets.
Therefore, I am not convinced that the pursuit of Bitcoin for censorship or a shield from government tyranny will be successful. Although I am convinced that Bitcoin can be equated to Digital Gold and shares key attributes with physical gold but with more volatility and price swings in the short term. A shield against inflation – perhaps; an opportunistic instrument to trade – sure.
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