Bitcoin vs Gold Investment Bulletin #1, Medium @eric.bott, 22 June 2020 (CC BY-SA 4.0)

Bitcoin vs Gold Investment Bulletin #1

Bitcoin Investment Data, in Terms of Gold with Analysis.



Bitcoin vs Gold Investment Bulletin #1, Medium @eric.bott, 22 June 2020 (CC BY-SA 4.0)



  • The gold price in the original data, over the period of interest (April 2013 to Date), shows a dollar price which was roughly constant at a value of around $1250 per ounce, until around 2018, when it began to increase steadily, to its current value of around $1750 per ounce. So in summary, we’ve seen an increase in gold price of around 40%, mostly occurring in the last two years.
  • The Bitcoin price, over the period of interest, has gone from around $100 per Bitcoin, to its current price of around $8000 per Bitcoin, which is an increase of around 8000%
  • From around the beginning of 2018, when the Bitcoin bubble burst, until the second half of 2019, we see that the Bitcoin dollar price changes lagged those of Bitcoin prices expressed in Gold. The brown line stays mostly higher than the blue. The Bitcoin price in gold was remaining at a consistently higher level than the Bitcoin price in dollars. So gold appears to have kept its value better in that period. Thus gold was a better store of value in that period, than bitcoin.
  • From the second half of 2019 onwards, we see the traces swap places. The blue line trends upwards relative to the brown. Increasingly more dollars are needed, to buy Bitcoin, than the increase seen in the amount of Gold required to buy Bitcoin. Thus Bitcoin has been a better store of value since the second half of 2019. We can see also that this appears to be steadily diverging, thus Bitcoin appears to be an increasingly better store of value than Gold, as time goes on in 2020.
  • The lines throughout the entire period show a consistent trend in the dollar price, relative to both gold and Bitcoin. The blue line is consistently moving upwards throughout. This is evidence that the dollar is consistently losing value, as expected. The dollar values of Bitcoin are rising at a greater rate than the gold rate of bitcoin, throughout.
  • The divergence we see becomes more profound towards the current date. We see a possible exponential effect beginning around there. Logically, continuance of that exponential will indicate a runaway dollar price of both Bitcoin and Gold, which could quickly result in nonsensical dollar prices for either. Hence the reason we should begin monitoring these relative to one another, as has been done here, to enable identification and removal of unstable, rapidly devaluing fiat currencies from meaningful valuations.

A Closer look at the recent Bitcoin Gold Price

Bitcoin vs Gold Investment Bulletin #1_1, Medium @eric.bott, 22 June 2020 (CC BY-SA 4.0)

Translating the Analysis to Every Day Effects

In the face of failing economies, the gold price of anything is far more important than the dollar price.




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