Gold has outperformed bitcoin by nearly 40% this year

The most embarrassing chart for the crypto industry this year is the price of real gold versus the price of its main digital rival. Since January 1, the yellow metal has rallied 23%, while bitcoin (BTC) has declined 12%.

Gold’s outperformance on price isn’t only impressive on an absolute basis but also disproportionately impressive due to gold’s much larger size. Indeed, there’s at least $21 trillion worth of mined gold in the world versus just $1.6 trillion worth of mined BTC.

Coded orange for BTC and yellow for gold, Protos has charted the divergence of the two assets as a visual checkpoint for BTC investors.

That $21 trillion estimate is at the lower end of many other estimates that acknowledge the length of time for which humans have hidden and hoarded gold.

Simon Hunt, for example, thinks that China alone might secretly own 40,000 tonnes of gold — 5X the amount held by the US — and that Russia owns over 11,000. Other researchers have an array of wildly divergent estimates for gold that sometimes reach above $100 trillion.

No matter which number is true for the actual market capitalization of gold, it’s indisputable that moving its price requires much more wealth than moving BTC’s price.

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Credit Suisse, which periodically estimates the total value of non-governmental wealth in the world, believes that net private wealth globally totaled $454 trillion as of the end of 2022 and is currently at least $432 trillion.

Even at the conservative, $21 trillion estimate of gold’s value, it takes a significant, 200 basis point withdrawal of the globe’s wealth to move its price 5%.

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