Bitcoin has many symptoms of speculative mania. Just like gold, its value varies from person to person. It has no intrinsic value. There is no direct way out for bitcoin. If digital assets develop enough to challenge the government's monopoly on currency issuance, official actions may easily restrict their use. It is estimated that 20% of bitcoin cannot be used because investors have lost their passwords. Bitcoin is not accepted in most places. Transactions are usually slow and expensive. When the network is blocked, it sometimes takes a few days, and the cost of each transaction even exceeds $25. The amount of computation required to maintain bitcoin blockchain alone is equivalent to the power consumption of a medium-sized country, which has a significant impact on the climate.

The supply of gold is not completely static. With the increase of mining, the supply of gold increases by about 1.25% every year. The storage cost of gold is often high, and the transaction in spot form is extremely inconvenient, at the same time, it is difficult to separate. Bitcoin does not have these shortcomings. There is no flexibility in the supply of bitcoin, and there is a ceiling. Only 21 million digital coins will exist. As of February this year, 18.638 million bitcoins have been mined. As long as you don't lose the code to access it, you can send it as easily as you send an email. It's resilient, verifiable and independent of any government, and most importantly, it's easy to divide.

Analysts and cryptocurrency investors expect bitcoin to have a higher long-term goal if it becomes a gold substitute. If bitcoin turns out to be widely used as a means of payment rather than just another asset to hold and invest in, there will be no cap on bitcoin.

Gold is still irreplaceable. The economic situation is the key to choose gold or bitcoin

Gold is regarded as a superior "anti legal" asset, which promotes the demand for gold. If people are worried about the long-term purchasing power of government issued currency, they will spend more money on gold, because gold is regarded as a hedge.

The huge debts of governments and enterprises around the world have also raised concerns about repayment pressure, and gold may be favored again at that time. At this point, as a medium of value storage and exchange, gold has many advantages over cryptocurrency. These benefits make it hard to believe that gold will lose its role as a hedge against inflation / currency risk. Safe storage in the vault. Custody of individual gold or silver retirement accounts. Actual industrial utility. After thousands of years of proof, life expectancy is longer.

With thousands of years of history, gold, which has always been the first safe haven asset, has its irreplaceable advantages. The volatility of gold can be controlled because production can accelerate or decelerate according to demand, but bitcoin is the opposite. Compared with other assets, even after the market structure is fully mature, its volatility may continue to increase. With the increasing popularity of bitcoin, investors can continue to buy bitcoin in the face of economic downturn and rising yield, and gold may continue to be the ultimate hedging tool against economic downturn, inflation and currency devaluation.

(2021-5-6)