Almost since its inception, observers have been calling Bitcoin “the new gold,” arguing that its limited supply makes it a modern hedge against inflation. World Gold Council Senior Market Strategists Joseph Cavatoni and John Reed discuss whether crypto can truly be considered a hedge and how it impacts an investor’s portfolio. Treasury publishes a translation of the key points.

The start of August 2024 will undoubtedly be remembered for a long time. The performance of assets, especially risk assets, has raised serious questions as investors have experienced volatility not seen since the onset of COVID.

Market events of this nature are a good opportunity to understand how different asset classes have performed against expectations. In this context, the level of rhetoric around cryptocurrencies and the use of Bitcoin as an “inflation hedge” or store of value has increased. Some even say that Bitcoin is “digital gold.” But many market researchers have concluded that this is not the case.

We believe that the best way to compare Bitcoin and gold is to look at the numbers, starting with returns. Over the past five years, both gold and Bitcoin have delivered significant returns. But let’s dig deeper and focus first on volatility. Over five years, the data paints a pretty clear picture: gold is less volatile.