Theo Matthew Kratter, a supporter, educator, and BTC market analyst, believes that Bitcoin will outperform gold in the long run, and those holding BTC should not sell their coins to invest in gold during the rapid surge above $4,000 per ounce.
Kratter stated that BTC is a better store of value based on its scarcity, portability, authenticity, divisibility, and other characteristics of currency. He added:
"The amount of gold reserves has increased by about 1-2% each year for many decades, even centuries. This may not seem much, but it certainly leads to the amount of gold reserves doubling every 47 years."
He indicated that the increasing gold supply could become exacerbated by unexpected discoveries of large untapped gold mines existing in the Earth's crust and in space.
Mr. Kratter further stated that the influx of new gold into Europe from the Americas in the 16th century destroyed the Spanish and Portuguese empires due to inflation from the massive amounts of gold suddenly flooding the market.
Market analysts continue to debate whether gold or BTC is a better store of value and medium of exchange, with Bitcoin supporters arguing that BTC is a natural progression in the evolution of money, while gold supporters argue that BTC is still too new and volatile to be used as a store of value.
Gold Carries Inherent Issues and Cannot Serve as Currency in the Digital World
"Transporting and insuring a large amount of gold is very expensive, so this is a very ineffective way to address trade imbalances," Kratter said.
According to Kratter, transporting even a small amount of gold through airports or other "heavily monitored" environments is a challenging task, and transporting a significant amount of gold is "almost impossible."
He added that the material properties of gold make it particularly unsuitable for online finance and the transfer of value through the digital world.
Mr. Kratter stated that gold cannot be sent over the internet, and tokenized gold products (physical gold held by a financial institution and represented on the blockchain) carry counterparty risks.
He noted that these risks include the issuing organization creating more gold tokens than the physical gold reserves, refusing to exchange digital tokens for physical gold, or the possibility of the government seizing physical gold reserves.
