by Roger Huang
Forbes
It’s an oft-debated topic, as Bitcoin skates with its all-time highs despite recent falls, and gold is at its all-time high denominated in US dollars. Which asset will perform better in a time of inflation and geopolitical instability? Which asset will do well if there’s a recession? Will gold outshine Bitcoin in the long term – or the reverse?
Both gold and Bitcoin are hard money
Both of them seem poised to do well on the inflation front since they’re meant to address the continual inflation of the money supply and what some term “money printing.” As money supply increases, the amount of fiat currency in circulation also increases – ultimately, this is the long-term decision-maker for inflation, which is a general increase in prices – or, flipped another way, the gradual loss of purchasing power for fiat money. Gold is a scarce commodity that tends to increase in value with geopolitical trouble. Historically, it was the backer of fiat currencies until the United States turned away from the gold standard system in 1971 in favor of the current system of unrestrained fiat currencies.