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.

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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.

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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.

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