Key Takeaways
- Bitcoin is often referred to as “digital gold.”
- The analogy runs much deeper than their shared role as a store of value.
- Both assets are embedded in the global financial system, partly thanks to high-profile cheerleaders like Paolo Ardoino.
The common analogy between Bitcoin and gold emphasizes shared features, like independence from central banks, limited supply, and universal recognition.
But the relationship runs deeper than the widely held view of Bitcoin as “digital gold.” Many prominent figures in the space view gold not just as a model metaphor, but as a material anchor that can root crypto assets in non-digital value systems.
The Intertwined Logic of Bitcoin and Gold
Even before Satoshi Nakamoto released the Bitcoin white paper in 2008, the ties between crypto and gold were already well-established.
Nick Szabo’s design for “bit gold” was an important intellectual predecessor to Bitcoin.
Szabo’s idea for a trustless, supply-capped digital asset minted by proof-of-work and recorded without a central counterparty never shipped. But it crystallized the idea that digital money could be scarce and function independently of established financial mediators.
Unlike Szabo, Satoshi didn’t make the comparison with gold explicit, but he didn’t need to. The system’s design made the comparison inevitable.
Bitcoin’s supply cap, difficulty adjustment, and energy-anchored issuance created a programmatic scarcity that rhymed with gold’s geologic scarcity.
Early Bitcoiners like Hal Finney helped frame the new technology as a store of value and hedge against inflation, cementing the digital gold narrative at the heart of the movement.
From GLD to Bitcoin ETFs
While gold’s status as a store of value can be traced back thousands of years, its modern financialization is a recent phenomenon.
The first exchange traded fund (ETF) to hold physical bullion, SPDR Gold Shares (GLD) was launched in 2004. It remains the largest gold ETF today, with over $100 billion in net assets.
GLD and its peers transformed gold into a modern investment instrument, inspiring a wave of new derivatives and borrowing opportunities.
More than two decades since GLD’s launch, Bitcoin is experiencing its own leap into the financial mainstream. Less than two years after spot Bitcoin ETFs arrived on U.S. stock exchanges, the largest, BlackRock’s iShares Bitcoin Trust (IBIT), has amassed assets worth over $85 billion.
As with gold, the ETF wrapper removed the need to hold physical commodities, broadening Bitcoin’s buyer base from individual investors to large funds and institutions.
Tether’s Gold Push
In the early years of USDT, Tether positioned the stablecoin as a digital dollar backed by bank deposits, but offered no transparency into its actual reserve holdings.
The first time the company disclosed a breakdown of its reserves in 2021, Tether revealed that 9.96% of USDT collateral was held in corporate bonds, funds, and precious metals. Since then, it has started publishing a more detailed breakdown.
According to Tether’s latest reserves report, physical gold bars make up around 0.0536% of USDT reserves, while Bitcoin makes up 0.0549%.
Moreover, the company’s embrace of gold extends beyond stablecoin reserves.
Launched in January 2020, Tether Gold (XAUT) has become the stablecoin issuer’s second most popular product after USDT, with a market capitalization of over $925 million. At the time of Tether’s latest report, XAUT was backed by nearly eight metric tons of physical gold.
Crypto Leaders on BTC and Gold
Under the leadership of CEO Paolo Ardoino, Tether has reaffirmed the company’s commitment to Bitcoin and gold, which it now holds in USDT reserves and on its own balance sheet.
“Tether will continue to invest part of its profits into safe assets like Bitcoin, Gold and Land,” Ardoino stated recently.
Beyond pure commodities, Tether has also allocated capital toward the broader ecosystem surrounding both assets. It has invested in Bitcoin mining companies, infrastructure projects, the Bitcoin treasury company Twenty One, and the gold royalty company Elemental.
Moreover, Ardoino isn’t alone among crypto industry leaders who prize gold as a tangible counterpoint to Bitcoin’s digital value.
Bridgewater Associates founder Ray Dalio views the two assets as key components of a modern investment strategy.
Highlighting concerns about inflation and rising government debt, Dalio now recommends investors allocate 15% of their portfolios to BTC or gold, a marked increase from his previous recommendation of 1–2%.
Not everyone in the crypto space is as sold on the virtues of precious metals, however.
In a recent post on X, Binance founder Changpeng Zhao (CZ) playfully pointed out some of gold’s disadvantages vis-a-vis Bitcoin:
“Gold is great if you can carry it everywhere, through airports for example, you have all the right sizes to pay people with, you can verify its pureness when receiving it, and they don’t dig more of it out of the ground.”
James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
