(Kitco News) - Gold continues to hold its own in the face of rising bond yields and a stronger U.S. dollar, but it faces yet another headwind as investors increasingly compare the precious metal with Bitcoin.
Famed billionaire investor Mark Cuban has weighed in on the debate, stating that he would rather own the top cryptocurrency than gold.
In an interview with Wired, Cuban noted that both gold and Bitcoin are viewed by many as stores of value; however, he argued that Bitcoin holds significant advantages over the precious metal.
“People look at Bitcoin as a better version of gold, and I agree with that,” he said.
According to Cuban, the biggest advantage Bitcoin has over gold is its utility. He described gold as impractical.
“People aren’t going to walk around with gold bars. ‘Oh, look, he owns gold.’ Bam! ‘Now I own gold,’” Cuban joked during the online interview. “What are you going to do with it? Let me slice you off a little piece?”
Meanwhile, he pointed out that Bitcoin has proven itself to function as a currency.
“It’s easier to buy and sell,” he said. “You can fractionalize it, you can use it to buy things, and you can transfer it internationally. And so I think it has more value than gold.”
Bitcoin was one of the few financial assets to outperform gold in 2024, with prices surging to $100,000 per token, marking a 136% gain for the year. Gold prices ended the year with a 26% gain, holding support above $2,600 per ounce.
Commodity analysts are closely watching Bitcoin in the new year, as its momentum could draw interest away from gold. According to some analysts, Bitcoin’s last rally to all-time highs in 2020 impacted gold prices by approximately 3%.
However, other analysts emphasize gold's greatest advantage over the leading cryptocurrency: its stability. While Bitcoin experienced a remarkable rally this year, its prices started the year nearly 40% below their 2021 all-time highs.
Some analysts argue that Bitcoin has yet to be tested as a true store of value, as the U.S. economy has demonstrated surprising resilience despite widespread expectations of a slowdown.
Looking ahead to 2025, analysts anticipate Bitcoin could face a significant test as the global economy slows and inflation remains stubbornly high, potentially creating a stagflationary environment.
Economic uncertainty continues to support gold prices, which are trading near a four-week high. Spot gold last traded at $2,668.70 per ounce, up 0.21% on the day. Meanwhile, Bitcoin last traded at $94,240 per token, down 0.41% on the day.
