Bitcoin's market value soars. Can it hold the throne of 'digital gold”?
Jul 30, 2025 pm 07:57 PMBitcoin is not "digital gold", but a speculative bubble; 1. Gold has a thousand years of history, practical uses and stable value, while Bitcoin has only more than ten years of history, lacks practical support and has drastic price fluctuations; 2. The Bitcoin market is driven by the "Boshi's theory", showing typical speculative bubble characteristics, which is highly similar to historical bubble patterns such as tulip fanaticism; 3. Bitcoin plummeted during the economic crisis, and its performance was synchronized with risk assets, and it did not have the function of hedging; 4. No mainstream countries regard it as a legal tender, lacking credit endorsement and currency stability; 5. Bitcoin is essentially a financial speculation in the digital age, not a financial revolution. Investors should be wary of its narrative trap of being beautified into a store of value, and ultimately retaining the value is real assets that can stand the test of time.
Bitcoin: Digital gold or speculative bubble?
Bitcoin's recent market value has soared, once again sparking heated discussions about whether it can become "digital gold". This title suggests that Bitcoin may become a long-term and stable storage of value, like gold. However, if we look at the essential characteristics and market performance of Bitcoin, we will find that this analogy has fundamental flaws.
Gold has been a means of storage of value for thousands of years, and its value comes from scarcity, physical characteristics and collective human consensus. In contrast, Bitcoin has only more than ten years of history, and its value is entirely based on technical architecture and investor psychology. Gold has industrial uses and decorative value, while Bitcoin lacks practical use support except as a medium of transactions. More importantly, gold prices fluctuate relatively smoothly, while Bitcoin is known for its drastic fluctuations - a characteristic that runs contrary to the ideal store of value.
The speculative attributes of the Bitcoin market are much greater than their possibility as a stable storage value tool. The sole purpose of holding Bitcoin by a large number of investors is to expect to sell at a higher price, and this "fool theory"-driven market is inherently unstable. All speculative bubbles in history—from the Dutch tulip fanatic to the South China Sea company bubble—have shown similar characteristics: novel assets, technical narratives, quick get rich psychology and drastic price fluctuations. The Bitcoin market perfectly reproduces this model.
True storage means of value need to maintain stability or even appreciate during economic turmoil. However, Bitcoin plummeted 50% in the market panic caused by the COVID-19 pandemic in March 2020, and fell more than 60% in the Fed's interest rate hike cycle in 2022 - a stark contrast to gold's performance in the economic crisis. This highly relevant feature of risky assets makes Bitcoin more like a "digital gambling factory" than a "digital gold".
Technological utopians often claim that Bitcoin will replace the traditional monetary system, but the reality is that no mainstream economy uses Bitcoin as fiat currency. Even experimental cases like El Salvador face many difficulties in implementation. Bitcoin lacks national credit endorsement and does not have the stability that currency should have, and its prospects as an alternative currency are very slim.
The Bitcoin phenomenon is essentially a variant of financial speculation in the digital age, not the financial revolution that its propagandists claim. Investors should be wary of the discourse trap of beautifying speculative assets into "digital gold" - history tells us that when the market begins to weave a rational narrative for speculative behavior, it often means that risks are accumulating. After the fanaticism subsides, what can retain value are ultimately those real assets that can stand the test of time.
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