For centuries, gold has been the the OG store of value - hoarded by massive empires, not-so-massive central banks, and potentially-massive uncles.

On the other hand, we have Bitcoin - the shiny new challenger that is still in its first phase of its adoption.

Is this a fair fight? Probably not.

But Bitcoin isn't backing down.

If you zoom out on the Bitcoin/Gold ratio, there’s one clear trend—it’s only going up and to the right.

And that’s a good thing. It means Bitcoin is growing much, much faster than gold.

There’s still a long way to go, but as long as this chart keeps trending upward, Bitcoin is on the right track.

What is the Bitcoin/Gold ratio?

The Bitcoin/Gold Ratio outlines how each of these assets are performing relative to each other. It’s a key metric for understanding the growth of digital assets in comparison to traditional ones.

For example, the Bitcoin/Gold Ratio currently sits at 0.0571. This means that Bitcoin's market cap is 5.71% the size of Gold's market cap.

This ratio can be calculated using the following formula:

Bitcoin Market Cap /Gold Market Cap = Bitcoin/Gold Ratio

$1,901,113,665,027 / $33,257,316,408,371 = 0.0571

As Bitcoin continues to grow in size and mature as an investment product, the Bitcoin/Gold Ratio is expected to trend upwards.

But what does that mean for investors and their portfolios? Check out the next section 👇

How to use the Bitcoin/Gold ratio for investing?

One of the best things about this ratio is that it can help gauge the overall market sentiment.

As Gold is viewed as a safer asset compared to Bitcoin, a certain trend in this ratio could give us some useful information.

• Rising Ratio: Bitcoin is outperforming gold, often aligning with increased risk appetite in crypto markets.
• Falling Ratio: Investors are leaning towards the stability of gold, which often signals a bearish sentiment in the crypto market.

If you zoom all the way out, the trend is clear—Bitcoin’s market cap is climbing much much faster than gold’s.

Thaaat being said, don’t use the ratio as a standalone indicator. Use it alongside other metrics like Bitcoin Dominance and DXY (US Dollar Index) to get a more complete picture.

Bitcoin vs Gold

If you’ve made it all the way down to this section, you might be wondering: “Why are they comparing Bitcoin to Gold? Why not Bitcoin and Equities or any other asset?”

First of all, great question.

Second, because Bitcoin is often called “Digital Gold”.

Huh, why digital gold? Wow, look at you. Another awesome question. Keep it going.

Both Bitcoin and gold share similar characteristics. That's why Bitcoin is often called “Digital Gold”. We’ve outlined 3 of them below:

Scarcity

• Gold: Limited supply — only so much can be mined from the Earth. Every ounce requires lots of man hours to mine.
• Bitcoin: Maximum supply of 21 million coins, with ~19.6 million already mined and only ~1.4 million left to be created.

Instead of man-hours, Bitcoin mining depends on electricity and computer processing power, or what we like to call "computer hours."

Store of Value

• Gold: Reliable store of value for centuries due to its durability and universal acceptance. However, it requires expensive and clunky means of storage (safes and banks) and is difficult to move.
• Bitcoin: Decentralized store of value, perfect for those seeking protection from government interference or currency devaluation. Much easier to move and store—no need for physical safes, just a simple $200 Ledger for secure storage.

Hedge against Inflation

• Gold: Has historically acted as a safe haven during high periods of inflation or economic uncertainty
• Bitcoin: Countries like Turkey, Argentina, and Venezuela, facing sky-high inflation, turn to Bitcoin as an escape pod. We broke it all down in our newsletter here.

Well, yeah. That’s pretty much it.

The points above are the core reasons we’re comparing $BTC to Gold and not any other asset.

Frequently Asked Questions