Will Bitcoin "Crush" Gold in the Long Run? Matthew Kratter Warns: Don't Sell BTC to Chase the Hype

According to Matthew Kratter, a supporter, educator, and BTC market analyst, Bitcoin will outperform gold in the long run, and those who hold BTC should not sell their coins to invest in gold during the bullish 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 like much, but it certainly leads to the amount of gold reserves doubling every 47 years.”

He stated that the increasing gold supply could become more serious due to unexpected discoveries of large untapped gold deposits that exist within the Earth's crust and in space. Mr. Kratter added that the new influx of gold into Europe from America in the 16th century destroyed the Spanish and Portuguese empires due to inflation from the massive amount 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 advocates arguing that BTC is a natural progression in the evolution of currency, while gold supporters argue that BTC is still too new and volatile to be used as a store of value. Gold Carries With It Inherent Issues And Cannot Be The Currency Base In The Digital World “Transporting and insuring a large amount of gold is very expensive, so this is a very inefficient way to address trade imbalances,” Kratter said. According to Kratter, transporting even a small amount of gold through airports or other “highly monitored” environments is a difficult task, and transporting a significant amount of gold is “almost impossible.” He further stated that the physical characteristics 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 the tokenized gold products ( physical gold held by a financial institution and represented on the blockchain ) carry counterparty risk. He stated that these risks include the issuer creating more gold tokens than the physical gold reserves, refusing to exchange digital tokens for physical gold, or the possibility of the government seizing the physical gold reserves.