In brief
- Bitcoin’s value rose nearly 12% over the last week, and 34% over the last month.
- Gold, on the other hand, rose 1% last week and about 4% over the last month.
- Bitcoin has seen frenzied activity ahead of next week’s halving event.
Bitcoin is often referred to as a digital equivalent of gold due to its scarcity and popularity as a store of value. But in addition to the tangible disparities, there’s another key difference: the price of Bitcoin, aka ‘Digital Gold’, has recently exploded. But the price of actual gold has not.
Over the last seven days, the price of Bitcoin rallied almost 12% in advance of next week’s halving event. It touched $10,000 multiple times over the last two days before falling to its current price, $9,600.
Gold’s price also grew this week, albeit at a much more modest rate. According to Business Insider, the growth level was just over 1%, rising from $1,700 per ounce to $1,718.
The difference is even more stark when looking back over the last month. Gold’s rise has been slow but steady, yielding a little more than a 4% return over the span of the month, while Bitcoin vaulted up about 34% in that same span.
Both were impacted by the coronavirus-fueled market crash between March 12 and March 13—and, to its credit, the price of gold dropped far less than the price of Bitcoin, which virtually cut in half.
Bitcoin and gold have now returned to their pre-crash valuations, but Bitcoin’s more dramatic swing means that anyone who bought the dip in March—when Bitcoin was at its lowest—would’ve seen more than a 100% return by now.
Bitcoin’s recent surge has been fueled by excitement ahead of the third-ever halving, in which mining rewards are cut in half until the next such threshold is reached in the future. It’s built into the code of Bitcoin to ensure that a steady flow of coin can be mined until 2140, and to make it a scarce asset.
The halving is currently expected to take place overnight on Tuesday.
Cryptocurrency exchange Coinbase reignited the Bitcoin vs. gold debate last week by arguing that recent shortages of gold—which occured due to increased demand—only support the argument that Bitcoin is the better store of value between the two.
Bitcoin’s continued surge ahead of its third halving may only pour more fuel on that fire.