Professor Coin: Can Bitcoin Replace Gold?
Professor Andrew Urquhart examines the relationship between Bitcoin and gold, questioning whether Bitcoin can replace gold as a store of value. Gold has historically served as a stable store of value, while Bitcoin, often labeled "digital gold," is characterized by its scarcity and decentralized nature, with a capped supply of 21 million coins. Research indicates that Bitcoin behaves more like a speculative asset rather than a safe-haven asset like gold, particularly during crises. Bitcoin's volatility is significantly higher than gold's, limiting its reliability as a substitute in risk-averse portfolios. Some studies suggest Bitcoin may serve as a short-term hedge against risk, but its inflation-hedging capabilities are inconsistent. As institutional interest grows, Bitcoin's market behavior may evolve, potentially making it more similar to gold over time. However, current evidence suggests Bitcoin cannot yet fully replace gold due to its lack of stability and historical resilience.
