Bitcoin, the world’s largest cryptocurrency, is a “safe haven asset” that consistently outperforms gold, with bitcoin now boasting better returns than the precious metal, according to a recent memo from Bernstein Research, an analytical division that is separate from but owned by Nashville-based global asset management firm AllianceBernstein, which manages some $670 billion.
Despite the punishing crypto winter of 2022 and high-profile implosions of FTX, Three Arrows Capital, and the Terra-Luna stablecoin, Bernstein Research cited bitcoin’s recent three-year spike in prices, which have reached a growth percentage as high as 150% at times. In fact, the company said, bitcoin’s market performance has beaten that of gold in the last five years, making it an ostensibly superior asset to back.
“Since its inception, bitcoin has consistently outperformed gold,” Bernstein Research said this month in a memo sent to TheStreetCrypto. “Over [the] last 3 years, gold has been flat, while bitcoin is up 150% (despite the 60% drawdown in 2022).”
If more investors come to agree with Bernstein Research, and bitcoin were to consume gold’s $13 trillion market cap, the price of each bitcoin in circulation would reach about $650,000.
Gold only acquired an exchange-traded fund (ETF) in the U.S. in November 2004, which some analysts believe played a pivotal role in gold’s appreciation over an eight-year period. According to Oppenheimer Asset Management’s John Stoltzfus and Matthew Naidorf, the price of gold rose just 16.84% prior to the gold ETF, but after the fund’s arrival, gold prices spiked 286.90%.
Similarly, bitcoin is on track to win approval for an ETF soon, after months of stalling by the U.S. Securities and Exchange Commission (SEC). With the SEC opting not to fight a ruling in favor of Grayscale’s ETF, many companies are now jockeying to claim the crown of first spot bitcoin ETF.
“I’m going to let each of these crypto exchange cases speak for themselves, and they’re in front of jurists,” said SEC chairman Gary Gensler this week. “They’ll play themselves out where they play themselves out.”
“The inaccessibility of crypto wallets and the treacherous track record of exchanges, has made bitcoin inaccessible to the mainstream. The bitcoin ETF would make Bitcoin accessible in broker accounts, well integrated with private banks and wealth managers/advisors,” Bernstein Research wrote, sending a positive signal that an unveiling of a spot bitcoin ETF might only herald mainstream adoption after the tumult of 2022.