Gold or Bitcoin: Which is the better choice for investors?

Gold has been a safe store of value for centuries, while cryptocurrencies like Bitcoin are seen as a digital alternative with potential. But which investment suits you better: gold or Bitcoin? In this article, we compare physical gold, digital gold and cryptocurrencies in terms of security, costs, handling and potential uses. You'll also learn how to invest in physically backed digital gold through Bitpanda Metals.

• Gold as an investment: Whether physical or digital, gold is considered a reliable store of value with manageable price fluctuations and strong crisis resilience.

• Cryptocurrencies offer flexibility: Cryptocurrencies like Bitcoin can be traded globally. They are very flexible but also significantly more volatile.

• Security, costs, price behaviour and ownership: When comparing gold vs Bitcoin, it comes down to technical risks, access, ongoing fees and legal requirements.

• The right form of investment depends on your goals: Long-term value preservation or active engagement – depending on your strategy, physical gold, digital gold or crypto may suit you better.

What is physical gold?

Physical gold is a precious metal in solid form, usually processed into coins or bars. It is used worldwide as a trade and investment asset. The value is based on the current gold price, which is usually quoted in US dollars per troy ounce. This price is largely influenced by supply, demand and monetary policy decisions of major central banks. Typical examples of physical gold include one-ounce coins, such as the Krugerrand, or standardised bars weighing 100 grams. These forms can be easily weighed, sold and traded worldwide.

Digital gold or cryptocurrencies: What’s the difference?

Unlike coins or bars, digital gold is not tangible. It is managed purely digitally but still represents real gold ownership. This generally refers to gold-backed, tokenised gold that is bought online and stored via a platform. Investors acquire a share of physically backed gold, which is held in high-security vaults. The digital units reflect this holding 1:1 and can be managed through a wallet or user account.

In addition to digital gold, there are also digital assets that are not tied to commodities, known as cryptocurrencies such as Bitcoin. They operate on a different principle and form their own asset class. Cryptocurrencies are based on blockchain technology – a decentralised, publicly visible network. Their value is not backed by physical reserves but is created through supply, demand and market sentiment. Well-known examples of cryptocurrencies include Ethereum, Solana and Bitcoin.

What is Bitcoin and how does it differ from gold?

Bitcoin is the first cryptocurrency and was introduced in 2009. Unlike gold, Bitcoin is entirely digital. It has no physical form. Bitcoin holdings are secured through private keys in a wallet. Originally conceived as a decentralised currency, Bitcoin has since developed into an independent asset class with a high market capitalisation. With a cap of 21 million units, Bitcoin is designed for scarcity – a principle that also applies to physical gold.

This is exactly why Bitcoin is often referred to as “digital gold”. The term is meant figuratively, however, because unlike physical gold, Bitcoin has no intrinsic value and is based purely on digital technology and market mechanisms. While gold has been established over thousands of years, Bitcoin is generally much more volatile and technically more complex. Blockchain technology replaces central institutions like banks or custodians with a network of many independent participants that transparently records and collectively manages transactions.

Gold or cryptocurrency: the differences simply explained

Whether in the form of physical bars, digital tokens or decentralised coins – you can invest in all forms of gold or cryptocurrencies like Bitcoin. However, they differ in key areas. To better understand their differences, it’s worth comparing gold vs Bitcoin across various criteria such as security, costs, price behaviour and legal frameworks.

Security

Security is a key factor when choosing assets. If you're deciding between physical gold, digital gold or cryptocurrencies like Bitcoin, you should understand the differences clearly. A direct comparison helps you better assess risk and find the right strategy for your investment. One crucial question is: How well is my investment protected from loss, theft or technical access? That’s because the method of storage and access to the asset differs depending on the form of investment:

Physical gold

• Can be stored at home, in bank safety deposit boxes or through specialised custodians

• Risk of physical loss through theft or damage

• Access is independent of digital technology

Digital gold

• Custody is handled by platforms that secure the physical holdings

• Access is usually via a user account, potentially secured further by two-factor authentication

• Technical failures or security gaps at providers can pose a possible risk

Cryptocurrencies like Bitcoin

• Stored in a wallet, either self-managed or through third-party providers

• Loss of the private key results in total loss of access

• Frequent target of phishing, hacks or technical attacks, especially with poorly secured wallets

Costs and handling

In addition to security, costs and practical accessibility are also factors you should consider. If you're thinking about investing in gold, whether physical or digital, or in cryptocurrencies like Bitcoin, you should find out what ongoing or one-off expenses might arise and how easy it really is to access the investment in everyday life.

Physical gold

This form comes with relatively high entry costs. In addition to the raw gold price, investors often pay minting premiums and shipping fees. Additional expenses apply for secure storage, such as for a safety deposit box or a safe. Handling is also less flexible. Buying or selling usually happens during fixed business hours and not always at the current real-time price.

Digital gold

Entry is often more affordable, as there are no production or shipping costs. Platforms offering digital gold typically include storage costs in the price or charge a small service fee. Access is via a user account. This allows buying, selling and managing to be done around the clock with minimal effort.

Cryptocurrencies like Bitcoin

Here, costs arise mainly from trading fees on platforms and network fees during transactions. To store Bitcoin securely, you need a wallet, either digital or hardware-based. You can use it anytime and anywhere – but you’ll need a basic technical understanding and must secure your wallet properly.

Price fluctuations

How much an asset fluctuates in price can significantly affect whether it suits your financial goals. If you're considering gold or crypto, it’s important to know how differently their prices behave over time and what that means for the risk and return potential.

The gold price usually fluctuates within a narrow range. Annual volatility over the past 15 years has been around 16%, which allows for relatively steady development over longer periods. Cryptocurrencies like Ethereum or Bitcoin show much greater price swings. They respond strongly to market trends, technological developments or political news. This often leads to rapid, sometimes unpredictable spikes up or down.

Bitcoin vs gold: price performance over the past five years

Gold moved from about $1,729 in June 2020 to around $3,307 in June 2025 – an increase of 91%, accompanied by relatively steady price movement. Bitcoin, on the other hand, rose in the same period from around $9,303 to approximately $107,327 – a gain of more than 1,050%, though with significantly more volatility.

The comparison makes it clear: gold behaves more steadily, while Bitcoin comes with strong upward and downward movements.

Ownership structure and counterparty risk

Anyone investing in assets should ask this question: How clearly is my ownership defined and how dependent am I on third parties? The differences between physical gold, digital gold or cryptocurrencies like Bitcoin are especially clear when it comes to legal ownership and the role of potential intermediaries.

Physical gold

• Ownership lies entirely with the buyer, independent of digital systems

• No counterparties required: whoever physically possesses the gold has full control

• Risks mainly occur during transport or storage by third parties

Digital gold

• Ownership is managed via the platform that stores the physical asset

• Users own a share in real, backed gold, but not the metal itself directly

• Trust in the platform’s credibility and security is essential

Cryptocurrencies like Bitcoin

• Ownership is verified via private keys managed in a digital wallet

• With self-custody, there are no counterparties – with platform custody, counterparty risk arises

• Loss of the private key means permanent loss of access, with no legal path to recovery

Bitcoin, digital or physical gold: which suits me better?

Not every type of investment serves the same purpose. Some are better suited for long-term protection, others offer more flexibility. So it’s worth asking yourself in advance: Are you focused on preserving value over time, or on reacting quickly and flexibly to developments? The type of investment that suits you best depends less on the technology and more on how you want to structure your wealth – whether with gold, crypto or traditional investments like stocks.

Cryptocurrencies like Bitcoin represent digital agility. Transactions can be carried out globally, around the clock and in small units. At the same time, they come with higher price volatility, require a certain degree of technical self-responsibility and a high level of confidence in your ability to manage security. If you want to act actively and take advantage of short-term market movements, this may be a good fit.

Physical gold is primarily aimed at investors seeking a lasting store of value. It’s tangible, independent of digital systems and ideal for strategies focused on security and value preservation. While access is less spontaneous, it’s more clearly structured.

Digital gold combines the value of real gold with the simplicity of digital management. It’s based on physical reserves but can be easily managed and traded online. For many, this makes it a balanced solution between tradition and flexibility.

If you want to buy physical gold in a flexible and secure way, Bitpanda Metals offers a simple solution. You become the legal owner and the gold is stored securely in high-security vaults in Switzerland. You can invest from just one gram, without any hassle for storage or transport. In addition to gold, you also have access to other precious metals such as silver, platinum or palladium.

Gold or cryptocurrencies: advantages and disadvantages at a glance

Every form of investment has its own strengths and weaknesses. Whether it's physical gold, digital gold or cryptocurrencies like Bitcoin: what matters most depends on your goals, your need for security and your approach to risk. The following overview helps you better understand the differences.

Physical gold

Advantages:

• Direct ownership of a real asset

• No technical knowledge required

• Proven during economically uncertain times

Disadvantages:

• Storage can be expensive and complicated

• Limited tradability in everyday life

• Premiums possible when buying and selling

Digital gold

Advantages:

• Physically backed but tradable digitally

• Access anytime via user account

• No minting or shipping costs

Disadvantages:

• Dependence on the platform provider

• Requires technical infrastructure

• Legal ownership usually handled via a third party

Cryptocurrencies (e.g. Bitcoin)

Advantages:

• Tradable worldwide and around the clock

• High liquidity and divisibility

• Independent of traditional financial systems

Disadvantages:

• Significantly more volatility

• Complex storage and security requirements

• Not clearly regulated legally and fiscally in all regions

Conclusion: the key differences between gold and cryptocurrencies like Bitcoin

Gold stands for stability, while cryptocurrencies like Bitcoin are associated with dynamism and technological openness. Both asset classes follow different approaches and meet different needs. In general, those aiming for long-term security tend to rely on tangible assets. Those who value flexibility and digital independence will find interesting opportunities in crypto assets. However, there is no one-size-fits-all recommendation for investors. What matters is how you want to shape your personal investment strategy, whether with precious metals, cryptocurrencies or, for example, stocks as a complement.

If you want to combine the traditional value of physical gold with digital accessibility, you'll also find what you're looking for at Bitpanda. You can buy real, physically backed gold starting from just one gram – securely stored in Switzerland and tradable around the clock.

More topics about gold

Do you want to understand how the gold price has developed in the past, what risks are involved in investing in gold and how gold reacts in different market phases? In the Bitpanda Academy, you'll find background knowledge on this, such as the importance of gold reserves for central banks and the role gold plays in the global economy.