Real Assets

Does Bitcoin Glitter Like Gold?

Idanna Appio Headshot
Idanna Appio, PhD

Portfolio Manager and Senior Research Analyst

As cryptocurrency in general has earned broader approval among the investing public, a new narrative for the utility of bitcoin appears to have taken root: bitcoin as “digital gold” that can serve as a modern store of value and potential hedge against inflation and the debasement of fiat currency.

We have our reservations, notwithstanding the surreality of weighing the mostly theoretical benefits of a 17-year-old cryptocurrency against those benefits gold has historically offered for millennia.

While bitcoin’s supply constraints may support the concept of gold-like scarcity value, its trading history fails to make the case for it as an effective store of value. As shown below, its latest swoon—bitcoin is down more than 25% from its October 6 all-time high—is just one of several over the past five years, a period characteristically marked by sharp spikes and massive downturns, prolonged climbs and lengthy troughs.1 With a standard deviation of returns more than four times greater than that of gold over the past five years, we believe this risk profile and price action amplify bitcoin’s appeal as a speculative vehicle and it weakens its claim as a reliable store of value.

Annualized Standard Deviation of Bitcoin Chart

1Source: Bloomberg; data as of November 19, 2025.

The opinions expressed are not necessarily those of the firm. These materials are provided for informational purposes only. These opinions are not intended to be a forecast of future events, a guarantee of future results or investment advice. Any statistics contained herein have been obtained from sources believed to be reliable, but the accuracy of this information cannot be guaranteed. The views expressed herein may change at any time subsequent to the date of issue hereof. The information provided is not to be construed as a recommendation to buy, hold or sell, or the solicitation or an offer to buy or sell any fund or security.

Past performance does not guarantee future results.

Risk Disclosures

All investments involve the risk of loss of principal.

An investment in bitcoin is speculative and entails significant risks, including potential loss of all or a substantial portion of the principal investment.

Cryptocurrency prices in many cases are highly volatile, and these digital assets should be considered a high-risk investment.

Investment in gold and gold-related investments present certain risks, including political and economic risks affecting the price of gold and other precious metals like changes in US or foreign tax, currency or mining laws, increased environmental costs, international monetary and political policies, economic conditions within an individual country, trade imbalances and trade or currency restrictions between countries. The price of gold, in turn, is likely to affect the market prices of securities of companies mining or processing gold and, accordingly, the value of investments in such securities may also be affected. Gold-related investments as a group have not performed as well as the stock market in general during periods when the US dollar is strong, inflation is low and general economic conditions are stable. In addition, returns on gold-related investments have traditionally been more volatile than investments in broader equity or debt markets. Investment in gold and gold-related investments may be speculative and may be subject to greater price volatility than investments in other assets and types of companies.

Strategies whose investments are concentrated in a specific industry or sector may be subject to a higher degree of risk than funds whose investments are diversified and may not be suitable for all investors.

Bitcoin is a digital currency (aka, cryptocurrency) for use in peer-to-peer online transactions.

Cryptocurrency refers to any form of currency that only exists digitally, that usually has no central issuing or regulating authority but instead uses a decentralized system to record transactions and manage the issuance of new units, and that relies on cryptography to prevent counterfeiting and fraudulent transactions.

Standard deviation is a statistical measure of volatility that captures the degree to which an investment's price has deviated from its average over time.

FEF Distributors, LLC (“FEFD”) (SIPC), a limited purpose broker-dealer, distributes certain First Eagle products. FEFD does not provide services to any investor but rather provides services to its First Eagle affiliates. As such, when FEFD presents a fund, strategy or other product to a prospective investor, FEFD and its representatives do not determine whether an investment in the fund, strategy or other product is in the best interests of, or is otherwise beneficial or suitable for, the investor. No statement by FEFD should be construed as a recommendation. Investors should exercise their own judgment and/or consult with a financial professional to determine whether it is advisable for the investor to invest in any First Eagle fund, strategy or product.

First Eagle Investments is the brand name for First Eagle Investment Management, LLC and its subsidiary investment advisers.

© 2025 First Eagle Investment Management, LLC. All rights reserved.