Bitcoin proponents continue to stand by the notion that the major cryptocurrency will replace gold as a savings and inflation-protection vehicle. However, bitcoin and the altcoin market performed worse than gold in 2022.
Data from Finbold’s Bitcoin ROI tool, which allows users to compare the return on investment (% ROI) of BTC compared to traditional assets such as stocks, currencies, indices and metals, shows that compared to gold, bitcoin has a 40.41% lower year-to-date return than the yellow metal.
Other precious metals, including silver and platinum, have outperformed bitcoin by 35.24% and 39.49%, respectively, since the beginning of 2022.
The cryptocurrency was valued at $46,700 in early 2022 and currently trades at $21,600. The losses of the flagship cryptocurrency this year have affected the entire crypto market, which has lost more than $2 trillion in market capitalization.
The losses also caused bitcoin to record its worst quarter in more than a decade, as its value fell more than 56% in the second quarter of 2022.
Interestingly, bitcoin and gold were in the same high inflation environment with possible interest rate hikes by the Federal Reserve.
Gold’s performance in the current environment may be due to the trust in the metals that has been built over decades. Bitcoin, on the other hand, is a young asset class on its way to maturity. Thus, the lack of a long history undermines BTC’s ability to appear to be an effective defense against inflation.
Despite BTC’s negative return in 2022, supporters of the cryptocurrency believe it will outperform gold in the next few years. Ronald-Peter Stoferle, managing partner at investment management firm Incrementum AG, believes bitcoin has eclipsed gold despite the ongoing bear market.
In his opinion, in the long term, BTC will become a less risky asset and establish itself as a means of savings.