Bitcoin: The 'Digital Gold' Comparison and Its Limitations

Many refer to Bitcoin as "digital gold" without knowing the origin of the term. "Comparisons between Bitcoin and gold have existed since its launch."

Many refer to Bitcoin as "digital gold" without knowing the origin of the term. "Comparisons between Bitcoin and gold have existed since its launch. When we talk about cryptocurrency 'miners,' it is a direct reference to gold prospectors who set out with their pickaxes, unsure if they would find any gold," explained Thibaut Boutrou, co-founder of Meria, a French investment firm specializing in crypto-assets.

The comparison is so widespread that some view the queen of cryptocurrencies as a new safe-haven asset. Two key features of Bitcoin support this view: its decentralized nature and, most importantly, its limited supply. "We already know that there will be no more than 21 million Bitcoins," said Alexandre Baradez, chief market analyst at IG France. "Like gold, it is a rare asset because it is limited."

However, the shockwave triggered in financial markets by Donald Trump's announcements on April 2 of high tariffs on a significant portion of products imported into the United States did not spare the cryptocurrency world. On the morning of Monday, April 7, Bitcoin's value had dropped by 10% compared to the previous day – a significant decline that continued over the following days. It was valued at over €70,000 before Trump announced a pause in the implementation of the tariffs. Since April 2, Bitcoin has lost 9% of its value.

Yet just weeks earlier, on January 20, the day of the 47th US president's inauguration, Bitcoin had reached an all-time high, surpassing €105,000. Since then, the asset has lost more than 19% of its value, according to a report published on April 7 by Binance, the world's leading cryptocurrency exchange platform. This downward trend extends beyond Bitcoin: the study also indicates that "total crypto market capitalization has dropped an estimated 25.9% from January highs."

'Too Volatile'

Given these figures, it is difficult to view Bitcoin as safe, even for industry players: "It is far too volatile," conceded Boutrou. "In a period like this, we expect a safe haven to better withstand market movements." Platform managers share this view. "We are far from the stability offered by gold," said Benjamin Chemla, co-founder of Shares, an investment platform for stocks and cryptocurrencies.

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