Bitcoin, throughout 2020, was being called “digital gold” because it mirrored the precious metal’s trajectory when the global economy faltered due to the ongoing COVID-19 pandemic. The cryptocurrency attained a market capitalisation of nearly $1 trillion early in 2021 and appeared to rival gold as a store of value that was likely to appreciate much more over time. But then, the market crashed and much of the gains were washed out n May this year.
On January 1 this year, Bitcoin price in India was a little over $29,300 (Rs 21.38 lakh), according to CoinMarketCap. At the time of writing this report, it was trading at around $37,600 (Rs 27.44 lakh) — a rise of nearly 30 percent despite the market crash.
On the other hand, in the international market on June 3, gold prices were at $1,904.36 (roughly Rs. 1.39 lakh) per ounce. On Tuesday (June 1), gold prices had hit their highest level since January 8 at $1,916.40 (roughly Rs. 1.39 lakh). Between January 1 and June 4, the value of gold has remained relatively static at around $1,893.66 (roughly Rs. 1.38 lakh) per ounce, according to Goldprice.org.
Considering you invested Rs 10,000 in each of the two on January 1, your Bitcoin investment would have risen by 30 percent to Rs 13,000 today, but your investment in gold would have remained largely unchanged..
To make it a lot more interesting, if you had invested Rs 10,000 in the meme currency Dogecoin on January 1, your investment today, June 4, would have appreciated 100-fold. Dogecoin price in India has risen dramatically from $0.004 (roughly Rs. 0.30) on January 1 to $0.39 on June 4 (roughly Rs.28), according to CoinMarketCap.
However, the recent volatility in the cryptocurrency market suggests that the status of Bitcoin and Dogecoin as viable alternatives to gold or any other traditional asset is debatable.