Store of Value: Gold or Crypto?

August 9, 2019

The first known record of gold as money and store of value comes from around 700 B.C. Lydians, people living in a region of western Anatolia, wanted to form electrum coins, so they combined gold with silver. Through the centuries, gold remained a superior store of value. There are several reasons for that:

  • Gold has a limited supply
  • It’s a highly liquid asset
  • As a precious metal, gold has a superior and unique properties
  • Gold is tangible, which means that it can a physical place for storing.

For thousands of years, gold has been fighting with the competition, and it has managed to remain an important store of value.

Its annual gains against other currencies are great, and the greatest was in 2008 against the pound, appreciated by 43.7%. At the moment of writing, gold’s price is $1,417.85 per ounce.

What about cryptocurrencies as a store of value?

Are cryptocurrencies store of value? Ever since the development of bitcoin, this question has led to many discussions. Although bitcoin has its advantages when it comes to online payments, being a store of value is a different thing.

Bitcoin is volatile and intangible. Its price can fluctuate daily, and it doesn’t exist as a physical property. Compared to gold, bitcoin is six times more volatile. These are just some of the reasons why it doesn’t fit as a mainstream payment method. And when compared with gold, bitcoin is definitely inferior as a store of value.

First, gold’s supply is limited and it increases by about 1.5% each year. Its unique properties such as fungibility and durability make gold more powerful compared with other precious metals.

On the other side, bitcoin’s supply is also limited, but there is always a possibility of being forked. Plus, gold has been on the market for thousands of years, winning over the competition, while bitcoin and with other cryptocurrencies are still in their early development.

Gold-backed stablecoins: best of cryptocurrencies and gold

Stablecoins are a type of cryptocurrency solving one of its biggest problems: high volatility. They are tied to an asset such as gold. In the case of gold-backed stablecoins, one coin represents a value of gold.

For example, one token equal to one gram of gold. Since gold is a popular store of value, and cryptocurrencies are slowly taking over the financial world, the combination of the two can lead to success.

And nobody knows that better than Liechtenstein-based crypto startup Novem Gold. The company developed a gold-backed stablecoin, built on the NEO platform.

Novem’s stablecoin is tied to gold, and each token represents 0.01 grams of gold. At the moment, the company is conducting an airdrop, so make sure to check that out.


For centuries, gold has been a synonym of the store of value. Contrary to gold, cryptocurrencies, including bitcoin have a long way to go before being considered as a worthy and reliable store of value.

We can say that gold-backed stablecoins have managed to find common ground and the sweet spot between the two.

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