Gold and Bitcoin have historically produced huge returns for investors, although they’ve also had their fair share of volatility and setbacks. Gold, particularly, is known among investors with long-term goals, while Bitcoin is known for its short and long-term returns based on the market’s volatility. While some investors will decide to own assets in one of the two, some will diversify and invest in both.
This analysis answers the question, ‘Gold or Bitcoin: which investment produces more returns and which is more volatile?’ Grab a seat while we drive you to a profound conclusion with our careful research.
Editor’s Pick
- As of September 13, 2023, the market value of Gold stands at $1,912.27 per ounce.
- The average close price of Gold from 2013 to 2022 was $1,406.07.
- In 2020, Gold reached its peak in the last decade, closing at $1,895.10 per ounce.
- Bitcoin reached an all-time high of $65,000 USD in November 2021.
- From 2013 to 2022, Bitcoin generated a return on investment (ROI) of 2,098.74%.
- In 2021, Bitcoin saw a significant price increase, partly due to Elon Musk’s endorsement and Tesla accepting BTC for car purchases.
- In September 2023, the volatility index (VIX) for Gold was 10.33%, while Bitcoin’s VIX was 3.51%.
- In 2013, Bitcoin had an extraordinary ROI of 5,414.57%, making it a standout year for early investors.
- The 30-day VIX estimate for Bitcoin was 1.81%, while Gold’s VIX estimate showed a decline of 6.65%.
Gold vs Bitcoin Historical Performance
Gold is a traditional, physical investment. On the other hand, Bitcoin is a digital, cryptocurrency investment. Historically, Gold investment started in 20041 when GLD became the first ETF to track gold’s price. Bitcoin, launched in 20092, started trading the same year with a price of approximately US$0.0013.
Gold Performance Over 10 Years
As of September 13, 2023, the market value of Gold stands at $1,912.27 per ounce. Its performance over the last ten years is shown below:
The average close price from 2013 to 2022 equals $1,406.07. This is more than the closing price of gold from 2013 to 2018. During the last decade, 2020 saw the peak of gold as price closed at $1,895.10.
Bitcoin Performance Over 10 Years
Bitcoin (BTC) was priced at 25,133.3 USD on September 12, 2023, while it reached an all-time high of 65,000 USD in November 2021. Its performance is based on its price, as illustrated thus:
From 2013 to 2022, or say the last decade, the return on investment (ROI) on Bitcoin investment is 2,098.74%. Candidly, a $100 investment on Bitcoin in December 2013, would have amounted to $2,198.74 at the end of December, 2022.
Comparing Both Historical Performance
With the figure derivatives of Gold and Bitcoin for each year as seen above, the past ten years history shows that BTC is more volatile than Gold. In essence, a highly volatile investment is risky, and the higher the volatility, the higher the profits or losses depending on the outcome.
For instance, an investor who invested one BTC in 2020 would make more than $18k in gain in 2021, while this is a loss of over $30k in 2022 for investors who invested one BTC in 2021. Gold is a less risky investment, this demonstrates its little gain or loss within the span of 2020 to 2022.
Sources: Investopedia1, Investopedia2, Investing News3, Macrotrends4, The National News5, Statista6, CNBC7
Gold vs Bitcoin Return on Investment (ROI)
ROI measures what investment would have turned out to be from period one to another. The ROI for Gold and Bitcoin takes ten year periods into account to see which investment has higher yields than the order. Below are the yearly ROI differentials for Gold and BTC:
Over the last ten years, the highest return for Gold was in 2020 when it earned 24.43% for its trusted investors. Unlike Gold, Bitcoin’s greatest ROI within a year peaked in 2013 when it returned 5,414.57% for investors who chose the investment in the previous year. Between 2013 to 2022, Bitcoin generated 2,098.74% in ROI, while Gold generated 51.84% within the same period.
Gold vs Bitcoin: Average Yearly Return
Taking the last decade (2013-2022) into consideration, the average yearly return for Gold is 2.065%. Bitcoin averaged 725.453% return each year.
Gold Vs Bitcoin: Best and Worst Years
| Investment | Best/Worst (Price $) | Best/Worst (ROI %) |
| Gold | 1,895.10/1,060.20 | 24.43/-27.79 |
| Bitcoin | 47,191.87/317.38 | 5,414.57/-74.33 |
Note that this evaluation is based on the period of ten years between 2013-2022.
For Gold, the best year in terms of price was in 2020 when the price fluctuated high to reach $1,895.10. This presented a profitable opportunity for investors in any of the past years. On the other hand, Gold’s worst performance was in 2015 when the price depleted from $1,199.25 in 2014 to $1,060.20. This was approximately a loss of $139 for investors in that period, and a loss of $1,390 for investors with ten ounces of gold.
For Bitcoin, 2021 was its best year, as the price of BTC averaged $47,191.87 throughout the year. A $18k+ increase in terms of assets for the Bitcoin investors from 2020. Unfortunately for BTC investors, the worst year was in 2014 when price fell short to $317.38. This accounted for around $437 loss of assets for investors who kept BTC in their portfolios.
Sources: Macrotrends1, Statista2
Bitcoin vs Gold: Current Volatility Index (VIX)
In September 2023, the current VIX for Gold stands at 10.33%1, while the VIX for Bitcoin is at 3.51%2. While the last 30-day VIX estimate for Bitcoin was 1.81%2, the last 30-day VIX estimate for Gold was a decline of 6.65%3.
Periods of High Volatility for Gold
Gold experienced pronounced volatility during specific years, especially in 2012, 2014, 2017, 2020, and 2021. While most of these years saw significant declines in the average 30-day change, 2020 stands out with an exceptional surge of 76.62%. This suggests that while Gold is generally considered a stable asset, it has had its share of turbulent periods, with 2020 marking a notably bullish phase.
Periods of High Volatility for Bitcoin
Over the past decade, Bitcoin has experienced periods of heightened volatility, with notable spikes in 2010, 2011, 2013, 2014, and 2020. The year 2011 saw the highest average 30-day volatility at 8.26%, indicating significant price fluctuations within short time spans. While volatility decreased in the mid-2010s, reaching its lowest in 2016 at 2.49%, it saw a resurgence in 2020.
Sources: Yahoo Finance1, Buy Bitcoin Worldwide2, Barchart3,
Gold Bitcoin Liquidity Analysis
Bitcoin is traded on various cryptocurrency exchange platforms. Coin base and Binance are the top-most used platforms for this trade. You can convert your Bitcoin (BTC) to cash through peer-to-peer (P2P) trading, credit/debit card or third-party payment method. Within an average of 10-30 minutes, your transaction will be processed to your bank details.
Gold, on the other hand, can also be liquidated. But unlike Bitcoin, it may take some time to get a buyer due to its physical nature. Selling Gold requires you to find a buyer who’s willing to own the valuable item. You can convert your Gold to cash by selling to local gold buyers, pawnshops, jewellers, Gold bullion or Gold ETFs. All these don’t come easily, especially when you’re looking to turn your asset to liquid.
Gold Bitcoin: Daily Trading Volume
Between September 12 and 13, the change in Bitcoin daily volume traded was 10.84%1, while there was a decline of 1.34%2 change for Gold daily volume.
Bitcoin Daily Trading Volume Between September 1-13, 2023.
There is a notable fluctuation in trading activity. The volume starts relatively low on September 1, peaks sharply by September 3, and then sees another peak around September 9. The highest trading volume occurs on September 3, surpassing 625,000 USD. Towards the latter part of the period, the volume appears to stabilise, though it remains considerably active.
Gold Daily Trading Volume Between September 1-13, 2023
There is a general upward trend in the early days, peaking around September 6. The highest trading activity is evident on this day, with volumes exceeding 6 million USD. Following this peak, there’s a noticeable decline in trading activity, with volumes tapering off towards September 13. This pattern indicates an initial surge in interest or market activity in the early days of the month, which gradually reduces later on.
How Much Gold Is There on Earth?
The amount of gold found on the surface of the earth per 40003 metres is 35 billion tons of gold, while 87 billion tons of gold is found under the ocean.
Another source quoted 244,0004 metric tons of gold being discovered. Only 187,000 metric tons were produced, while only 57,000 metric tons were reserved underground.
The World Gold Council broadcast that 208,8747 metric tons of gold is being mined. While also, experts mentioned that, at least 3,000 metric tons of gold are being mined every year.
How Much Bitcoin Is There for Every Person?
In a recent research by Worldometer, the world population is currently 8,060,350,8036, while there are 21 million5 Bitcoin for people to mine. Of these 21 million, 19,485,156.256 have been mined. So, how do you find the number of Bitcoin available per person, if everyone is mining? Let’s do the arithmetic together.
To calculate how many Bitcoins are available per person in the world, we divide the total available supply of Bitcoin (21 million) by the current world population (8,060,350,803):
Available Bitcoin per person = 21,000,000/8,060,350,803 = 0.00261
Approximately, there are 0.00261 available per person given assuming an even distribution.
Since only 19,485,156.25 of Bitcoin are presently mined, then assuming an even distribution of the Bitcoin presently in circulation, we have:
Available Bitcoin per person = 19,485,156.25/8,060,350,803 = 0.00242
Approximately, everyone would have mined 1.08 Bitcoin on average if everyone owned Bitcoin.
Who Owns the Most Gold?
John Paulson, an American hedge fund, is said to be the single man with the most gold. As of 20158, he owned more than $292 million SPDR Gold Trust.
Who Owns the Most Bitcoin?
The creator, Satoshi Nakamoto, is the largest holder of the crypto. According to estimates, he owns close to 1,000,0009 Bitcoin.
Sources: YCharts1, YCharts2, Homework3, USGS4, Worldometer5, Buy Bitcoin Worldwide6, Oxford Gold Group7, India Economy and Market8, Learn by Bit9
Gold Bitcoin Market Capitalization
Bitcoin is a digital currency that’s making waves currently in the world, while Gold has since been a lucrative business for investors.
Bitcoin Market cap as of July 20231 was $569 billion, and the value for all Gold mined within the same time frame was $12.25 trillion.
Gold Bitcoin Market Capitalization by Year
Gold’s market capitalization maintained a relatively steady pace from 2010 to 2016, with only minor fluctuations. The highest peak for Gold is observed in 2020, reaching a market cap of over $12 trillion, possibly due to global economic uncertainties and the traditional role of gold as a safe-haven asset.
On the other hand, Bitcoin, being a nascent asset in 2010, started with a meager market cap of $1.5 million. However, its exponential growth becomes prominent post-2016. By 2021, Bitcoin’s market cap had surged to an impressive $877.5 billion, showcasing its rapid adoption and growing trust among investors and institutions alike.
Sources: Money1, Finasko2, Statmuse3, Statmuse4, Statmuse5, Global Data6, Statmuse7, Statmuse8, Statmuse9,
Bitcoin Gold Institutional and Global Interest
Gold and Bitcoin have been backed by the global institutions as form or method of exchange of values for values. Bitcoin, for example, was adopted by high profile company like Tesla as a means of payments in February 20211. While the company has since renege the decision to continue with Bitcoin as a form of payment, it opened the space for wide acceptance of the coin from few companies of the world.
Countries with Gold Reserves vs. Bitcoin Investments
The United States proved they’re not only at the forefront of technology and the world economy, they once again prove their dominance in Gold reserves and Bitcoin investments. Let’s see how the countries rank below.
| Country Rank | Gold (in Tons/$Bn)2 | Bitcoin (Ownership/ population in %)3 |
| 1 | United States, 8,133/480.8 | India, 85.50/6.3% |
| 2 | Germany, 3,555/198.35 | China, 27.80/0% |
| 3 | Italy, 2,452/ 144.97 | United States, 20.50/ 6.2% |
| 4 | France, 2,437/ 144.08 | Nigeria, 15.20/7.6% |
| 5 | Russia, 2,299/ 135.92 | Brazil, 14.30/6.7% |
| 6 | China, 1,948/ 115.17 | Indonesia, 10.90/4% |
| 7 | Switzerland, 1,040/61.49 | Vietnam, 7.60/7.9% |
| 8 | Japan, 846/ 50.02 | Turkey, 6.90/8.3% |
| 9 | India, 785/ 46.41 | Pakistan, 5.70/0% |
| 10 | Netherlands, 612/36.18 | Phillipines, 5.60/5.2% |
The United States, India, and China are the three top countries with Gold reserves and Bitcoin investments based on data provided above. European countries such as Germany, Italy and France led in Gold reserves as Asia-Pacific regions dominated in Bitcoin investments.
Gold or Bitcoin: Which Is a Better Investment
According4 to Ray Dalio, founder of Bridgewater Associates, ‘Bitcoin has no relation with anything’. He further expressed that Bitcoin is too volatile to act as a store of value. Dalio believed that gold existing for thousands of years as a medium of exchange makes it a reliable asset for storing wealth.
Robert Herjavec5, the CEO of the cybersecurity firm of Herjavec Group, aired his view over Bitcoin investment. He sees Bitcoin as an electronic payment coming to replace the concept of cash transaction someday. While he further stated that Bitcoin will have great benefits for human transactions, he expressed that the large bucks made today are a result of cryptocurrency’s existence.
Sources: Tech Crunch1, Madison Trust2, World Population Review3, Yahoo Finance4, CNBC5,
Bitcoin vs Gold Environmental Concerns
Out of the electricity generated in the world, 0.38%1 is used to mine Bitcoin. On the other hand, Gold has a 4%2 effect on weather conditions. 8.8% and 20.8%3 of water shortages and soil erosion are also caused by gold mining. These two are really a concern on environmental health.
Gold vs Bitcoin Future Predictions and Speculations
The end-of-year 20231 gold price prediction stands at $2,076. Looking ahead to 20302, there’s a forecast suggesting that gold could reach as high as $2,700 per ounce. Furthermore, by 20253, it is anticipated that the gold price will rise to $3,449 according to another source.
Market analysts project that by 20254, BTC could attain a value of approximately $90,534.99. Also, forecasts suggest that Bitcoin’s price may surge even higher, with expectations that it could reach a maximum of $214,232.74 USD by 20265. Moreover, research indicates the possibility of Bitcoin’s market capitalization hitting the $1 trillion mark by 20376.
Sources: Capex1, Investing Cube2, Primex BT3, Bitcoin Wisdom4, The State5, Libertex Europe6
Conclusion
The choice between Gold and Bitcoin depends on individual investment goals, risk tolerance, and time horizon. If you prioritize stability and are looking for a long-term hedge against economic uncertainties, Gold may be more suitable. If you are comfortable with higher volatility and seek the potential for substantial gains, Bitcoin might be a consideration. However, conducting thorough research and consulting with a financial advisor before making any investment decisions will be helpful.
Frequently Asked Questions (FAQs)
Gold and Bitcoin have shown positive and negative ROI over the last ten years. So, using historical returns as an investment determinant is not sufficient.
Gold has been trading many years ago before Bitcoin was launched in 2009. However, Bitcoin is closing the gap on Gold’s market cap of $11.55 trillion. As of 2021, Bitcoin market cap was $877.5 billion.
Bitcoin and Gold mining have negative impact on the environment. While mining of gold causes soil erosion, habitat destruction, water shortages, etc., Bitcoin mining rely on energy-intensive hardware due to its substantial amount of electricity consumption.
The tax implications of selling Bitcoin and gold are complex. They depend on location, the amount sold, how long you held the asset, and whether it’s considered a collectible. Also, tax laws and regulations related to cryptocurrencies like Bitcoin are evolving.
Regarding gold investment, the United States (8,133) has almost three times the reserves in gold than other nations like Germany (3,555), Italy (2,452) and France (2,437). On the other hand, India, China and the United States all made the top three countries with the most investments in Bitcoin.
