Bitcoin vs. Gold: A Historical Model Comparison

Can gold show where bitcoin is heading? Only to a limited extent. After it was freed in 1971, gold rose 24-fold in nine years, then lost 70 % and took 28 years to get back to its old high. Bitcoin has grown much faster since 2010, with cycles that keep getting smaller, and so far has regained its highs after two to just over three years. The gold price target, one bitcoin at about $1.39 million, is a calculation, not a forecast.

Many bitcoiners call gold the role model: what gold achieved as a store of value, bitcoin is meant to catch up on. This article takes that literally and lays the price histories of both side by side. It is about paths and models, not about which money is better. Scarcity, custody, returns over the last ten years and taxes are compared in Bitcoin vs. Gold: Which Store of Value Wins?

Gold after 1971: a free price in three phases

Until August 1971 the United States exchanged dollars held by foreign central banks for gold at a fixed price of $35 an ounce. On 15 August 1971 President Nixon closed this "gold window". From then on the gold price was gradually set by the market. For the comparison with bitcoin this is the starting point: an asset with a fixed price is suddenly valued freely.

The well-known milestones, based on LBMA prices in London:

All amounts nominal in dollars. After inflation, the 1980 high stayed out of reach considerably longer.

Phase 1: the revaluation (1971 to 1980)

In just over eight years gold rose from the official price to $850. That is about 46 % a year on average. It was driven by high inflation, two oil crises and a loss of confidence in the dollar.

Phase 2: the long dry spell (1980 to 2001)

Then the US Federal Reserve raised interest rates sharply, inflation fell, and gold lost about 70 % by 1999. Around 2001 the price was still at that level. Anyone who bought in January 1980 waited until 2008 to get back to their purchase price. In real purchasing power they were still at a loss even then.

Phase 3: the second rise (from 2001)

From about $253, gold rose 7.5-fold by 2011, about 18 % a year. Another −45 % followed by the end of 2015, and a new high only in 2020. Over the whole period from August 1971 to November 2026 that comes to just under 9 % a year.

Bitcoin's path: faster, but with shrinking cycles

Bitcoin has no official starting price. The first daily close in the site's data is $0.086 on 18 July 2010. On 7 November 2026 bitcoin closed at $75’868. Over a little more than 16 years that is about 132 % a year on average, a pace gold never had. But the average hides the fact that the growth got smaller with every cycle.

Growth phases from low to next high

From high to high it looks similar: 39-, 17-, 3.4- and 1.8-fold. Since 2015 the rises have each taken about three years, but each one brings less.

Crashes and the time back to the old high

The declines are getting shallower: from −93 % to −84 % to −77 % and −53 % so far. Every single bear market with its depth, duration and recovery is shown in All Bitcoin Bear Markets Compared. The chart overlays all crashes, each from its all-time high:

What the comparison shows and what it doesn't

What they share: revaluation in bursts

Both curves follow a similar pattern: an asset is discovered by a small circle and then revalued by more and more people. For gold this happened when the fixed price fell away. For bitcoin, when an experiment became an asset that funds and companies now hold too. In both cases the rise did not come evenly but in violent bursts with deep setbacks in between.

The difference: bitcoin is still growing into its market

In 1971 gold already had thousands of years as money behind it. It was not discovered anew, only repriced. That is why its revaluation was over after eight years. Bitcoin started near zero and is still gaining new holders today. That explains why its rises were so much bigger, and also why they are getting smaller: the bigger the market, the more money each further doubling needs.

This slowdown is exactly what the Power Law model describes. It does not let the price grow at a fixed percentage but with a power of time. Its annual growth rate therefore falls on its own:

Carried forward, the line only grows as slowly as gold's average since 1971 around 2075. That is a pure extrapolation of the formula, and no model says anything reliable more than 50 years ahead.

Can bitcoin have a dry spell like gold?

Yes, nobody can rule it out. Gold shows that a store of value can move sideways for 20 years after a major high. That has not happened with bitcoin so far: even someone who bought at the 2013 high was back in profit after just over three years. The Power Law does not expect such a phase either, because its lower bound, the floor, rises every year. So far the price has closed below this floor on only 3.7 % of all days. But a model estimated from 16 years of prices cannot know a phase that has never happened. Where the model is weak is described in Criticism of the Bitcoin Power Law.

The gold price target: bitcoin with gold's market value

One of the best-known bitcoin calculations asks: what does one bitcoin cost if all bitcoin together are worth as much as all the gold in the world? The calculation is simple and needs only three numbers.

The target has three weaknesses you should know:

1. It moves. Gold has risen by just under 9 % a year on average since 1971, and the stock grows through new mines. Today's price target will be out of date in ten years.
2. Gold is not only a store of value. A large part of the stock is jewellery, and some is used in industry. Bitcoin would only have to take over the store-of-value role, not replace the whole amount. Depending on how you count, the target is therefore lower.
3. It says nothing about timing. Whether and when bitcoin gets there is not part of any market-value calculation.

Timing can only be estimated with a model. If bitcoin keeps following the Power Law, the line itself reaches $1.39 million in February 2035, the floor in June 2039. When the site's trend reaches the marks for 10, 25, 50 and 100 % of gold's value is shown in the section "Bitcoin as digital gold: how big can bitcoin get?" of Bitcoin vs. Gold.

Stock-to-flow: gold as the yardstick for scarcity

Stock-to-flow divides the existing stock by the new supply per year. The number says how many years today's production would need to create the stock again.

Gold: World Gold Council. Bitcoin: 3.125 BTC per block × 144 blocks × 365 days.

Since the 2024 halving, bitcoin is twice as scarce as gold by this measure. The well-known stock-to-flow price model concluded that the price must jump with every halving. The price has not followed it since 2021. Why the measure describes scarcity well but fails as a price model is explained in Stock-to-Flow: Strengths and Limits of the Model. For this comparison it is enough to note: gold shows that high scarcity alone does not guarantee a rising price. Gold stayed scarce from 1980 to 2001 too, and the price still moved sideways for 20 years.

The limits of the comparison

• A single path. Gold after 1971 is one case, not a statistic. Had the US Federal Reserve acted differently in 1980, the curve would look different.
• A different starting point. In 1971 gold was already known everywhere as a store of value. Bitcoin had to build its value first. Phases therefore cannot be transferred year by year.
• Different holders. Central banks hold a considerable share of the gold and rarely trade. Bitcoin is held mainly by individuals, funds and companies, who buy and sell faster.
• A short bitcoin history. 16 years of prices is not much. The Power Law fits these years well, but every look far into the future remains an extrapolation.

Which other price models exist and what they are worth is compared in Bitcoin Price Models at a Glance.