Topic: Bitcoin vs. Gold - is market cap parity utopian? (Spoiler, no!) - page 3. (Read 898 times)

Capitalization doesn't require any extensive explanation as to how the term is defined. You could argue that the reasons for a certain capitalization to have emerged in the first place is complex and multifactorial. But this is where your post becomes interesting: it took gold thousands of years to build a market cap of say $17 trillion. It took bitcoin 15 years to build a market cap of $1.3 trillion. I am oversimplifying a few matters here, but you get the basic idea. Bitcoin got attacked 1,000s of times, by hackers and we don't even know by whom, but certainly by forks, by alt coins, by governments trying to regulate it to death via prohibition. And it still exists, is thriving and people around the world entrust the network with $1.3 trillion as of now. When people realize that it can handle that amount without taken down, the network is due to grow further.

In other words, the longer history that gold can look back on didn't hold bitcoin back from growing at an impressive pace, unprecedented pace. Considering this is a technology that nobody can ultimately control, I find that quite impressive. There is no person that arbitrates between parties like an Amazon customer care agent, but people started to understand that this job is done by a decentralized network in the fairest manner possible. Fully neutral via algorithmic determination. There can be now judge in the world being as neutral as the bitcoin network. Those things are complex and not easy to grasp for folks who get first involved with it.

Gold is easy, but make no mistake that many people don't know what purposes it serves beyond being used for wedding rings. But compared to bitcoin, I think gold has a lot of flaws. The degree of freedom it provides to you is close to zero if we define freedom by flexibility and capital mobility, being able to leave a country, being able to pay someone across boarders, being able to legally hide value from whomever, being able to protect it from confiscation, being able to split it in smaller units or aggregate it into bigger units as you wish, remain solvent and able to pay for things when your bank accounts got frozen, being able to shift value from inflationary assets to a stable or deflationary asset, being able to anonymously/pseudonymously transact (if you do it correctly), being able to fund causes important to you without getting caught or transactions getting blocked or you getting excluded from the financial system forever, etc....

There are so many things to mention why bitcoin is ahead that in my opinion the history that you are talking about only proves the point I mentioned above. What took gold thousands of years, bitcoin was able to build similar levels of trust in about a decade. We've already entered the range of trillions here. Yes it is still 13x or 14x, but that doesn't matter as much.


That is your opinion and I won't say that your personal, subjective point of view is wrong. But "it is no secret" sounds like quite a superlative to me and I am sure there are people who don't own a single ounce of gold, but thousands of bitcoin. But I would not call them "not smart" or "less smart" than someone who owns both

I think capitalization is something that is quite extensive to explain, but it is necessary to point out something, gold has a much longer history than BTC and that is something that has weight, now BTC is the asset of the future and many young people prefer BTC more than gold itself, so everything is a matter of changes in the world, the most accepted without a doubt is gold, but the most desired worldwide is to have BTC, both represent money and it is not a secret that having both is the smartest.

At the market level, gold has gained a lot of value, BTC too, BTC is expected to be the most important asset of the future and even so, gold will prevail, I would say that they cannot be compared, there are many intrinsic things that are different between the assets, much less put one against the other or in the form of competition, for me both are safe havens of value.

We don't even have to go to 2012 to make it look insane! Just have another look at my excel table in the first post, we have been at 1,287x in 2015 and 665x in 2016. It decimated the gap by 50x since then. This is still out of this world and bitcoin has been outperforming all asset classes for such a long time that even a year of two of consolidation and sideways movement is irrelevant, or maybe rather a good sign as it had tons of volume and it means that there is either some redistribution among folks around the world, or there is some very strategic accumulation going on. But the volume is there and it is not there because people have fun buying for 65k and selling for 65k the next day.

Gold currently represents about 3.6% of wealth. Bitcoin currently represents about 0.276% of global wealth. If I had to make a bet whether gold goes 10x first or bitcoin goes 10x first, I'd know in which basket to put my eggs. Gold has not much room to grow for very practical reasons. Of course if you are a billionaire and hold a few tonnes, it could still double in price or maybe triple and it is worth it since you are already rich. But where should it go? 33%, one third of global wealth? I know that global wealth can and will increase overall and then the relative numbers are a bit different. But as of now, bitcoin is the call if you want some substantial upside opportunity.


Peter Schiff is amazingly ignorant and twists the truth and other peoples' reasonable arguments by so much that I am sometimes shocked how he never gets lost for words... but to his credit at least the guy has a true agenda. He is talking bullshit for a reason.

@EarnOnVictor are you running a precious metal dealing company or are you sitting on a ton of gold? Then I would understand your fact denying approach to understanding bitcoin's potential. But if you are ignorant for no reason, then there are other issues that I can't exactly name.

In comparison to gold, bitcoin is winning MOAR bigger than gold, even if we start the measurement from 2012 rather than going to bitcoin's first few years of having little to no price... So even if we start bitcoin from $5 per coin in the beginning of 2012, it should be pretty fucking obvious that bitcoin has been kicking the shit out of gold, and any reasonable inference is that bitcoin continues to kick gold's ass and will likely kick gold's ass in the future.

So if you want to be a dumbass and consider gold to be either superior to bitcoin or even equal to bitcoin, then you can have fun staying poor if you choose to allocate in that kind of way or even if you choose to allocate anymore than 10% the size of your bitcoin holdings to gold, then you are quite likely failing/refusing to understand either bitcoin or gold, its current role in society and its likely future role in society... including that bitcoin is likely in the ballpark of 1,000x or more more valuable than gold in terms of its market cap and bitcoin currently has a market cap of about 1/15th the size of gold, so even if it might take 50-200 years or more for some kind of a reasonably more accurate reflection of the relative market caps of each (bitcoin and gold), you may well be uninformed and/or in a fantasyland if you continue to believe that currently gold is a good or even anywhere close to as good as bitcoin as an investment.


If EarnOnVictor is so dumb as to invest/trade in accordance with his dumbass proclamations, then surely he is going to be faced with a pretty damned high likelihood of having fun staying poor (relatively speaking).. Him and Peter Schiff.. to the extent that Schiff might also be investing in accordance with his proclamations of the supposed better value of gold versus the worser value of bitcoin.  Surely, some folks might not be so dumb as to actually invest (or trade) in accordance with their nonsensical (lacking in evidence/logic) proclamations.

It is good that you bring up the 14x multiplier because that is what I was trying to convey and what EarnOnVictor seems to not understand.

We went from a 5.66 million multiplier in 2010 to a 14x multiplier today. It is astonishing to see people ignoring those facts.

@EarnOnVictor, you registered just recently, but can you imagine what you would have said in 2010, 2011, 2012...,2016, etc.? The multiplier in 2016 was ~665x. Then the multiplier got decimated again within just two years to 50x. Guess what, it got cut down by almost 4/5th again until now (and a couple of times in the meantime).


Sorry dude, but I trust Bitcoin more than I trust you for very good reasons! You better use all your BTC to buy gold then! I mean you are still around here on the forum trying to make some BTC, huh?

I like how you said


As if that alone wouldn't be already insane. Try to create something out of thin air that is worth $1.3 trillion within 15 years...

This is not about Gold won now, Gold has been winning before our ancestors were born and it will continue to win because it is better preferred as a safe-haven asset during uncertain times, the physical presence is contributory as well. Like I earlier said, I do not want to compare Gold and Bitcoin again for many reasons, but still, I fault your statement that "I'm sure Bitcoin will beat the "gold's volatility"" without adding the provable/constructive reason why such will happen. We should stop living in the fantasy of what we believe will happen but what is feasible and provable.

Yes I agree with you, gold is winning right now due to global volatility, but Bitcoin really has tremendous potential. We are about to see a big bull market very soon, the Bitcoin market is going up again, and there is a very good chance that Bitcoin will become much more viable in 2025. Right now the stability of gold and sustainable income from real estate will appeal to many over Bitcoin, but in the future Bitcoin will be the most profitable.

And if we see Trump as the winner of the US presidential election, Bitcoin will definitely become more likely, because he has been announcing that he will support crypto for a long time, so we are sure that if Trump wins, Bitcoin will definitely go much further. And then Bitcoin will outperform everything including gold and real estate.

You don't believe Bitcoin can do a 14x, when it's been doubling every year on average for the last few years?

The physical value is only a tiny fraction of its monetary value. Gold is valuated at where it is, because it has had the best money properties until 2009. Same like, Bitcoin is valuated at where it is, because it is recognized as the best money in terms of monetary properties. It is not valuated at $1T, *just* for being peer-to-peer cash system.

Gold won due to global instability, that's why the gold price rise really high in this year. But, I'm sure Bitcoin will beat the "gold's volatility" in the next year since we're heading to bull season, if gold price can rise for 25%, Bitcoin will make it 100%.

That's true Bitcoin not yet become the safest asset for Average Joe, most still think gold and real estate are the most promising.

I'm done comparing Bitcoin with Gold, Gold will win some and Bitcoin will win the others, it has always been like that. I am also not one of the people who believe Bitcoin will meet Gold in market capitalization, and my reason is mainly that Gold has the physical value that Bitcoin doesn't have aside from the fact that it has existed for so long to have built the trust of the biggest guys in the industry.

Can you see the way Gold has garnered more trillions of dollars in just a year? Bitcoin couldn't even hit $1.5T till now. We should be realistic, Gold is so valuable and people will continue to hold it dear regardless of how we may pretend and it's not everyone who will trust the virtual Bitcoin, ever, trust me.

This part needs an addendum and some clarification.

Using the term "dominance" is wrong in my opinion. The correct term is market cap ratio. They basically took bitcoin's solo market cap and divided it by the sum total of an increasing number of shitcoins' market caps. For example right now there are about 10000 altcoins listed on coinmarketcap.com so that is 1/10000.

Additionally it should be pointed out that market capitalization is the wrong factor to even consider when it comes to altcoins because we have no way of knowing their true circulating supply (eg. ETH has 72 million premine most of which is not in circulation) and they can "print" billions out of thin air (you create a token virtually free with billions as its supply and with only $1 dollar price that is billions of dollars of market cap out of thin air).

Another reason is because compared to 2017 for instance, a lot of those shitcoins have died and a lot of the super hyped up and pumped shitcoins like ethereum got dumped hard. Lets not forget that ETH was once worth 0.15BTC and it is now only 0.039BTC.

I agree that there is no need for "gold money" doesn't need to come into bitcoin for it to go up since bitcoin has its own adoption but it is possible that because bitcoin is a new "asset" that people are investing into and as an excellent option for diversification, they put some of their money that was supposed to go into gold into bitcoin instead.

Besides lets not forget that the only reason why gold has been soaring over the past years is the global tensions and the fact that countries like China, India and others have been on a gold buying spree amassing large amounts of it in their vaults expecting the global conflicts to grow and the global economy to become unstable.
That means if all global tensions were to end today, in 3 to 6 months gold would crash hard while bitcoin would soar much higher than anything we've seen so far.

This is actually a good clarification regarding the term "winning". Yes, it is about the mechanism. But you could even overstretch the term "winning" as to call those winners who lose the least. No point of contention here though, the dollar will make you lose significantly. The scarcity aspect of BTC can't be replicated, neither can it be ported into another cryptocurrency as we have seen with all those forks. You can port the data and the balances, but you can't port an entirely genuinely grown network and BTC does have that advantage because it was under the radar for so long.

But the point of my post wasn't so much about a general comparison again because we have seen plenty of times. What I found interesting is rather the excel part and how quickly mBTC approached the value of 1 ounce of gold. That is why I put in some effort into the standardization as I admit, I wouldn't have thought myself about 10 years ago that 1 mBTC would become so valuable so quickly. In hindsight yes because this is the effect of decentralization and being open and public, everyone around the world can buy it somehow and keep it.

And then I saw so many threads who said at 1k that it won't go to 10k and at 10k it was said it can't go to 30k etc. That's why I thought the mBTC - oz. comparison could be interesting.

I added some data points like global wealth because some people (how I perceive it) think that a large chunk of global wealth privately held is parked in gold. But it's relatively small with around 3%. Considering this and then the trend towards digitization and all the needs and wants people have in terms of capital mobility and value preservation, I think BTC has a long way to go. It was mostly to give some people who have their doubts a bit more data to base their own conclusions on. I believe that the majority of the forum couldn't tell from the top of their head how much private wealth there is globally and how BTC relates to that.

A trend I am also observing is that more and more young people would get interested in BTC, but not so much in gold. If this generational change from physical to digital assets continues, then that is another catalyst for the price.

Its clear the idea of market cap is not a simple fixed target.   Gold was in a cyclical bull market before BTC even came into thoughts of Satoshi and today Gold reaches an all time high decades after.
   These two assets have another thing in common which is they both come with ridiculous targets higher, some say gold will be $10,000 an ounce and aren't joking.   For context the price was about 30 dollars per ounce beginning the seventies.

So there is alot of growth in gold past present and very likely the future.   Somehow we have to estimate if a fast car will be passed by BTC moving even faster.    I certainly think the peaks of BTC will exceed gold at some point, the sharp shape of BTC patterns and its ability to spike upwards can even put the commodity market to shame so peak price certainly.

The overall day to day of BTC being a stable market cap larger then gold would be a different consideration.  They both suffer alot of speculation which muddies the water.  I think both are bullish but if someone seriously said the price will half I would have to read the reasoning and timing as quite possible.

  Dollar itself has spiked upwards at times, its not a balanced situation and at times past USA has been 50% of global trade.  The dominance of USD was justified in those days but now I view DXY as about as stable as a melting iceberg, subject to dangerous alterations.  Invariably in decline, dont doubt it can turn on you and remains gigantic in its momentum & unavoidable when it moves.

   For starters DXY is a fake measure of value, its not reflecting real trade but both political and historic ties between countries.  With technology altering alot of the world beyond recognition its fair to expect BTC to do better of the two.  The majority of what I expect is volatility and erratic prices in all assets, instability favors gold which is probably rising upto this election result.  BTC benefits from weak dollar but will react differently to USD as it is a risk or speculative asset to most large market players.

It depends on how you define "winning". I suppose you refer to fiat currency. While USD is considered to be global reserve currency, I wouldn't call it a "winner" in terms of economic reality. People who save on the dollar are losing.

The best money will always rise to the surface. The market mechanism is simply too powerful to ignore, regardless of whether this world is governed by bureaucrats. If a bureaucrat says that bananas is good money, it doesn't make it good. It just makes anyone hearing him poor.

Even though you are probably correct in your conclusion that bitcoin is like gold but more than gold, your description of bitcoin being a store of value and a hedge against inflation does not differentiate bitcoin from gold since gold is also those two things.

What differentiates bitcoin from gold is that it is better money than gold.  
As compared with gold, bitcoin is:
1) more verifiable,
2) more divisible,
3) more easy to transport
4) more flexible in terms of programability
5) more scarce
6) less burdened by third party costs - including being able to secure..
7) and yeah there are probably a variety of other things, but who cares?

The above list is enough to establish bitcoin as not ONLY a little bit better than gold but likely in the territory of around 1,000x or more better than gold, even though bitcoin is currently ONLY about 1/15th the price of gold (in terms of total market cap)..  so if we might realize that currently, bitcoin is around 30,000x undervalued as compared to go, then we should be able to identify that bitcoin is a buy as compared with gold.. yet at the same time, even though through the past 13-ish plus years, the market has been facilitating the catching up of bitcoin to gold in terms of its market cap growing relative to gold's market cap, yet it surely could still take the market another 50-200 years to sort out these matters in terms of people realizing the fair market value of each of them relative to one another and also it may not be clear if gold has to come down in its price/value or bitcoin has to go up in price/value or a combination of both.

Sure, people are going to have differing opinions, and if you conclude that the current market value of bitcoin as compared with gold is fair or that bitcoin is overvalued as compared to gold, you seem to be living in fantasy land and/or denial like some of the loonies who believe either that you should have equal parts or that you should have more gold than bitcoin.. almost pure stupid, even though smart people believe that kind of nonsense, and also they hinge on the historical value of gold blah blah blah.. which seems also to be in a kind of selective denial and they are free to do whatever they want including likely coming around to the fact that governments and institutions are going to come around too. even though they are used to gold, why would they be holding the inferior money, since value gravitates towards the soundest of monies, which happens to be bitcoin if anyone had not realized and appreciated such factual matter.

what I meant by the statement "Bitcoin is Gold and more" is that like Gold it can be used as a store of value and hedge against inflation.

The US dollar became the official reserve because it was backed by Gold and was relatively stable.
Dominance of money is usually associated on how they can resist inflation.

I believe I understand what you were trying to convey. I am not sure about the phrase "Bitcoin is Gold and more" though. Bitcoin isn't gold, but it might be more than that. I understand there is some tricky rhetorics in my sentence. But I stick to it and since humanity values things in the name of value, bitcoin might indeed be soon more than gold.


Who claimed that a comparison is a definite need? I didn't. But I don't see a problem in comparing a plane with a bike. You can easily do that, crunch the numbers, look for carbon foot print, cost of maintenance, value generated and time saved, risk to die using one or the other, you name it. But since you already know it all, there is not much more from my side to add.

Thanks for the comment!


This is an interesting question here. Does best money always win? Or does most money in existence sometimes win because there are variables of control over the system and how the system is allowed to evolve?

But apart from that, I agree with you that in your and my opinion, bitcoin is at least the best competition we could hope for in the face of what we have right now.

Thanks for the comment!


How is it not proper to compare anything? I can compare asset classes, i can compare tools of any kind, I can compare SPVs, I can compare pretty much anything anyone wants for as long as they share at least one characteristic. I think bitcoin and gold do share at least one characteristic.

Thanks for the comment!


No one denies that? I don't know because I don't know everyone. Gold will exist forever because even if it ceases to be important, nobody would have interest in destroying it. This might be fundamentally different for bitcoin. But I personally believe that there have been tries to destroy or stop it, and the realization that there is no destroying or stopping bitcoin, the biggest players in the world instead decide to go with it. I have no hard evidence, but this is what I suspect.

Thanks for the comment!

No one denies that bitcoin is more profitable than gold because it is very small and has a lot of potential for growth. That is both the advantage and disadvantage of bitcoin because higher returns come with higher risks, everything is proportional to each other.

There is no guarantee that bitcoin will last as long as gold to be comparable to gold, everything is still unknown for bitcoin and when investing in it we are taking on greater risk. Gold, on the other hand, does not need to prove itself any further because it has proven itself for the past 1,000 years. Gold does not increase too quickly but is extremely stable and always ensures the value of our assets whenever the world is unstable.
Have you ever seen gold dumped 50-70% in the event of war, inflation, recession? But that happens regularly with bitcoin, an asset that is still considered high risk.

Bitcoin is the choice of those who are willing to take risks for high returns while gold will be the choice of those who are already rich and need a safe haven.

There are pros and cons when it comes to this aspect. Now, it is up to the investor how he gauge his chances here. But if possible, you can always invest in both to gain the benefits on these 2.
For most non-crypto users, definitely, they will go for gold. But for people here, they will surely include btc in their investment portfolio.
Getting the benefits of both assets will be a good thing. Besides, you are mostly likely considering other type of assets or already have other assets, if you can afford to.

It is not proper to compare these two assets because they are different from each other.
Of course, I know that gold market cap is 14x that of bitcoin, but gold have been in existence for a long period of time, and if bitcoin can be able to survive that long, the market cap will be bigger than that of gold. Bitcoin is still very young, and we can see how much profit it is giving to investors which is bigger than that of gold, and this is the reason why more people will continue adopting bitcoin overtime boosting its market cap.