Why Bitcoin Will Outperform Gold: Insights from a Former Coinbase CTO

Highlights:

• A former Coinbase executive has explained why he anticipates Bitcoin outpacing gold, citing several instances to support his claims.
• The X post captured transactional intricacies and liquidity in favor of Bitcoin.
• Bitcoin remains below gold with significant margins in global assets rankings.

In a lengthy tweet, Balaji Srinivasan, a former Coinbase’s Chief Technical Officer (CTO), explained why he envisages Bitcoin outperforming gold. While the former CTO’s post does not contain a timeline for the flip, his convincing submission suggests that he anticipates BTC attaining the milestone soon.

Notably, one of the most potent reasons to prove his assertion stemmed from his qualification of Bitcoin as the global reserve asset. While his conviction remains unproven, several global happenings, especially the anticipated change in the United States political landscape, suggest that his assertion might seem true.

Bitcoin’s Borderless Transactions Will Stand the Test of Time

Aside from the global reserve concept, the remaining part of Srinivasan’s tweet dwelt on the relative comparison between transactions involving Bitcoin and gold. He stated: “Anyone can buy or sell virtually any amount of BTC at any time in any country on any device for a known price without any necessary intermediary. Nothing else is like this.”

To further explain his point, the former Coinbase CTO made several analogies. One of his examples entailed the intricacies of selling $10 million worth of gold and an equivalent value of Bitcoin (digital gold). According to him, trading with gold requires moving bricks securely to wherever the seller finds a physical gold exchange.

On the other hand, performing a similar transaction in Bitcoin requires clicking a single button to identify a willing buyer from any part of the world. “Or a set of buyers, as you can sell $10M from Boston to multiple buyers in Bangalore, Buenos Aires, Berlin — all in a single fill on a single limit order,” Srinivasan added.

Think about the logistics.

To sell $10M in gold, you need to securely transport bricks across borders to a physical gold exchange.

But to sell $10M in digital gold, you just click a button to instantly find a willing buyer anywhere in the world.

Or a set of buyers, as you can… pic.twitter.com/N0fpFGCT1Q

— Balaji (@balajis) December 11, 2024

Germany’s Gold Repatriation Operation Cited as Another Example

Another scenario in the former CTO’s tweet spotlighted Germany’s gold repatriation from New York’s Federal Reserve. Per Srinivasan, Germany spent almost $10 million to fund the operation between 2013 and 2020. The former CTO emphasized the massive spending and the lengthy period required for the European nation to conclude the transaction, adding that Bitcoin does not require such bureaucracies.

JUST IN: Billionaire Ray Dalio says, “I want to steer away from debt assets and have some hard money like gold and #Bitcoin” 🙌 pic.twitter.com/cGepTUrhRl

— Bitcoin Magazine (@BitcoinMagazine) December 11, 2024

Additionally, the trendy X post captured that reputable exchanges have suffered implosion due to massive volumes of Bitcoin transactions. In dealing with gold, it seems impossible to establish a significant sales size because it requires one’s physical presence.

In conclusion, Srinivasan noted that Bitcoin’s digital nature impacted its liquidity, surpassing gold by about 1,000X or even 10,000X. With such massive liquidity, Srinivasan believes that Bitcoin will flip gold soon.

Bitcoin and Gold Positions in Global Assets Rankings

Despite Bitcoin’s impressive performance, which saw it clinch the $100K price status, its position in the global assets ranking has remained significantly below gold. Per CompaniesMarketCap’s latest data, gold ranked as the world’s most valuable asset, with a market capitalization of about $18.514 trillion.

On the other hand, Bitcoin occupies the seventh spot in the most-priced global assets rankings, with a $1.976 trillion capitalization. Over the years, gold has established a wide margin, evidenced by the second most valuable asset (Apple) value. For context, Apple boasts about $3.767 trillion in market capitalization.