Gold vs Bitcoin: Which is the Better Hedge?
Written by Mariyam Sara
1 min read | Updated on October 17, 2025, 14:09 IST
Similarities Between Gold & Bitcoin
Dissimilarities between Gold & Bitcoin
Balanced Strategy Required
Upstox is a leading Indian financial services company that offers online trading and investment services in stocks, commodities, currencies, mutual funds, and more. Founded in 2009 and headquartered in Mumbai, Upstox is backed by prominent investors including Ratan Tata, Tiger Global, and Kalaari Capital. It operates under RKSV Securities and is registered with SEBI, NSE, BSE, and other regulatory bodies, ensuring secure and compliant trading experiences.
Investors are often on the lookout for an investment that will act as a hedge against inflation and economic cycles. Both gold and bitcoin are considered a hedge against economic cycles that will protect their money.
Let’s look at the similarities and differences between Gold and Bitcoin so you can decide which is the better hedge.
Similarities Between Gold & Bitcoin
Gold & Bitcoin have limited supply and aren’t influenced by the economy’s ups and downs. Let’s look at other similarities between these two,
Storage of Wealth
Both assets act as great storage of wealth, where you can invest your money, especially during economic uncertainty.
Limited Supply
Both are limited in supply. Gold is a natural resource that is limited in a literal sense, while Bitcoin is capped at 21 million coins.
Decentralized Control
No authority regulates or controls Bitcoin or Gold. Both these assets are independent of any entity.
Mining Process
Both Bitcoin & Gold are mined. Gold is physically mined, while Bitcoin is computationally mined. The mining process of these assets requires certain resources.
Diversification & Hedging
Both assets are considered safe havens by investors as they act as a hedge against economic downturns. Other financial markets don’t significantly impact the prices of gold and Bitcoin.
Dissimilarities between Gold & Bitcoin
Here are the differences between Gold & Bitcoin
Asset Type
While Gold is a tangible asset, Bitcoin is a non-tangible and digital asset.
History
Gold can be tracked back to 4700 and 4200 BC, while Bitcoin was created in 2009 and became the speculative asset we know today.
While gold is universally and institutionally accepted, Bitcoin is not universally adopted.
Volatility
Gold prices have low volatility, while Bitcoin is highly volatile and often experiences sudden price fluctuations. Prices steadily grow in the long term, but we can’t say the same for Bitcoin due to its volatile nature.
Scarcity
Gold is a scarce natural resource, but Bitcoin’s scarcity is artificially scarce. Bitcoin's maximum supply is artificially enforced by its code.
Regulatory Risk
Gold faces minimum regulatory risk due to its strongly established history and tangible form. The regulatory landscape for Bitcoin is still evolving and remains uncertain, which impacts its prices.
Storage
Since gold is in physical form, it has to be stored in a safe or bank locker and thus incurs insurance and storage costs. And transporting gold can be slow and risky.
Bitcoin is digitally stored, hence it can be easily transferred and accessible from anywhere at any time.
Balanced Strategy Required
Many modern investors allocate a small portion of their portfolio to both gold and Bitcoin to hedge risks, benefit from diversification, and balance traditional with modern asset classes.
If you're a conservative investor who prefers investing in physical and low-volatility assets, then Gold is the best option for you. But if you’re a risk-taker who takes advantage of the volatile nature and digital assets, then go for Bitcoin.
About Author
Mariyam Sara
Sub-Editor
holds an MBA in Finance and is a true Finance Fanatic. She writes extensively on all things finance whether it’s stock trading, personal finance, or insurance, chances are she’s covered it. When she’s not writing, she’s busy pursuing NISM certifications, experimenting with new baking recipes.
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