The crypto industry has been on a whirlwind ride.

In late 2022, the cryptocurrency market was tormented by scandals, falling prices, and investors fleeing the industry for safer havens, including gold and precious metals.

This has led some investors to question whether cryptocurrencies and Bitcoin, in particular, are able to play a similar role to gold within an investment portfolio.

Let’s start with the basics and take a look at the key similarities and differences between gold and cryptocurrencies.

Gold and crypto: how are they similar?

Both gold and bitcoin are in limited supply

While gold has been in use for centuries, it has a finite supply. In the same way, Bitcoin's total supply is just 21 million.

Both gold and bitcoin are alternatives to fiat currencies

Gold was used as money in the past and can be converted to cash in almost any currency. Bitcoin, meanwhile, is being increasingly integrated into various global payment systems.

However, comparing gold’s and bitcoin’s use as a form of payment, bitcoin might hold an edge, since it is a fixed unit of account that’s easily divisible and transportable.

Gold, in contrast, might not be as easily divisible on the spot, especially if you own bigger gold bars.

Gold and crypto: how are they different?

Gold has been around much longer than bitcoin

Bitcoin first appeared in 2009, so, as an asset, it hasn’t even reached adulthood. Gold, however, is what you might call its elder peer, as its history dates back more than 5,000 years.

You can touch gold, but you can’t touch bitcoin

Bitcoin is a digital currency that exists only digitally and can be bought only online. So, obviously, you can’t actually touch it, unlike gold bars and coins.

Gold, in contrast, is a physical asset that you can touch and buy online or in a physical store.