Opinion: Bitcoin is a "safe haven asset" more attractive than gold

Last Monday, asset management firm AllianceBernstein released a memo that bluntly compared Bitcoin to gold, calling it a "safe haven asset."

Analysts emphasize that in addition to Bitcoin’s inherent value derived from its limited supply of 21 million bitcoins (known as its “hard currency properties”), the asset’s returns are also undeniable.

“Bitcoin has consistently outperformed gold since its inception,” the analysts wrote in an Oct. 16 note. “Gold has been flat over the past 3 years, while Bitcoin is up 150% (despite a 60% drop in 2022).”

Over the past five years, Bitcoin has delivered five times the return of gold, they wrote.

The article was written prior to the recent multi-day Bitcoin rally, which began as early as Sunday evening, when Bitcoin (BTC) was trading near $30,000. It then peaked at $35,100 in the early hours of Tuesday morning before falling to just below $34,000 at the time of publishing.

Analysts also noted that Bitcoin is a young asset compared to gold, which saw the launch of the first ETF tracking the commodity’s price in 2004.

In fact, speculation about a possible ETF is what’s driving Bitcoin’s value higher right now, though some industry observers believe this price action is premature, as ETF approval rests with the U.S. Securities and Exchange Commission. So far, the SEC has been dragging its feet, delaying multiple spot Bitcoin ETF applications multiple times throughout 2023.

AllianceBernstein said that the main obstacle for Bitcoin is its "UX UI" problem. Analysts believe that this problem can be reversed with the emergence of a spot Bitcoin ETF.

“The inaccessibility of crypto wallets and the spotty record of exchanges have kept Bitcoin from entering the mainstream. A Bitcoin ETF would make Bitcoin accessible in brokerage accounts and integrate perfectly with private banks and wealth managers/advisors,” wrote analysts at AllianceBernstein.

Grayscale may win the race for a Bitcoin ETF as the SEC declined to appeal an August ruling in its favor. The D.C. Court of Appeals said the SEC’s move to block the company’s Bitcoin Trust (GBTC) from setting up an ETF was “arbitrary and capricious.”