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Market Update

The Case For (and Against) Bitcoin as Digital Gold

Despite some surface similarities, the two assets are fundamentally different.

Bitcoin, the oldest and largest cryptocurrency based on market value, is often described as digital gold. And on the surface, the two assets have a few things in common. Both assets can be used as stores of value that exist outside traditional government and monetary systems. Both have a limited supply (gold in terms of limited physical supply and bitcoin because it has a built-in issuance cap of 21 million coins), making them a potentially valuable hedge against inflation. Both assets have a relatively low correlation with mainstream asset classes such as stocks and bonds. And both assets attract a fervent core of true believers whose enthusiasm can sometimes border on fanaticism.