Is Bitcoin Similar to Gold? An Integrated Overview of Empirical Findings

Abstract

This paper sets out to explore whether Bitcoin can be considered as a globally accepted asset that has a resemblance to gold, which is widely considered to be the safest choice. An integrated overview of the empirical findings generated by the nascent but increasingly proliferating literature concerning the nexus between Bitcoin and gold is provided. The majority of evidence reveals that Bitcoin has a long way to go before it acquires the same characteristics as the safe-haven asset of gold. Overall, Bitcoin is found to be an efficient hedge against oil and stock market indices, but to a lesser extent than gold. Bitcoin presents low or negative correlations or an asymmetric non-linear linkage with gold. Despite sharing some common features with traditional assets, Bitcoin is found to be a good hedging asset in portfolios with gold. Moreover, evidence reveals that gold is a better and more stable safe-haven investment than Bitcoin.