Gold has played a central role in global finance for thousands of years - as a store of value and safe haven in times of geopolitical or economic uncertainty. But Bitcoin, with many similar characteristics, is increasingly threatening gold's status - especially among younger, tech-savvy investors who are willing to accept the relative immaturity of the new asset class. But do investors even have to choose between Bitcoin and gold - or can both coexist in a portfolio?
The "digital gold" narrative explained
To understand why Bitcoin is considered digital gold, let's take a quick look at the characteristics that make gold an effective store of value:
- ScarcityThe US Geological Survey (a US government agency) estimates that about 187,000 tons of gold have already been mined, while another 57,000 tons are still underground.
- DurabilityGold does not decay and lasts Tausende von Jahren.
- DivisibilityGold can be divided into smaller pieces such as coins or bars.
- TransportabilityLighter gold coins and small bars are easy to transport.
Now to the parallels with Bitcoin. Firstly, Bitcoin is scarce. Satoshi Nakamoto, the pseudonymous inventor, limited the total supply to 21 million bitcoins in order to make it inflation-resistant (by May 2025 there were 19,86 Millionen im Umlauf). It is no coincidence that Satoshi created Bitcoin during the great financial crisis - as a reaction to the massive expansion of the money supply by central banks (quantitative easing).
Bitcoin is also long-lived: although it has not existed for millennia, the network has been online since its launch at 99,9 % online at that time - the last outage (6 hours) was over 12 years ago.
In terms of divisibility and transportability, Bitcoin even has an advantage: the smallest unit is a satoshi - one hundred millionth of a Bitcoin - and can be stored in a digital wallet. Gold, on the other hand, has to be crushed at great expense, and larger bars require secure storage (a kilo bar will cost over 92.000 €).
These characteristics make it clear why both Bitcoin and gold - often referred to as "hard assets" - retain their value and can play a similar role in a portfolio: as inflation protection or a safe haven in times of crisis.
Bitcoin vs. gold or Bitcoin + gold?
Given the many similarities: Can bitcoin and gold make sense in a portfolio at the same time?
The low correlation speaks for it. An analysis by CoinShares shows: Bitcoin and gold only move in the same direction at the same time 18% of the time - less than the S&P 500 or NASDAQ. This speaks in favor of additional diversification through the combination of both asset classes.
Asset manager State Street has also recognized the complementary nature of both assets: According to a survey conducted at the end of 2024, almost a quarter of wealthy clients hold both Bitcoin and gold. They see gold as a safe haven and protection against market risks - Bitcoin, on the other hand, as a growth asset related to innovative technology. Nevertheless, many of these investors expect both assets to increase in value in the long term.
Ray Dalio, founder of Bridgewater Associates (the world's largest hedge fund), made similar comments at the Future Investment Initiative 2021 - also known as "Davos in the Desert". When asked which asset he would "put under his bed for a rainy day", he replied: gold and Bitcoin (but not the US dollar).
"Gold is a dead asset, but massive money creation and debt debasement are powerful forces. I want that technology, a little bit of bitcoin, and I want to bet on these other industries," Dalio explained.
What you should know before investing
The common characteristics of gold and Bitcoin make them useful components of a portfolio. However, Bitcoin is clearly more popular with younger investors: according to a survey by DeVere, 77% of customers under 40 would rather hold Bitcoin than gold.
However, the choice doesn't have to be either/or - Bitcoin offers growth potential, gold the classic hedge. Together they improve the diversification of the portfolio - precisely because of their low correlation.
Find out how the CoinShares-Produkte allow investors to hold Bitcoin alongside traditional assets in their portfolio so that it can contribute to overall performance.
Sources: Devere1, Bitpanda2, USgov3
