Gold Discovery Shows Why Bitcoin is the ‘Hardest’ Asset

A massive gold deposit—the largest ever found—has shaken the precious metals industry. After all, it’s a monumental discovery. But it also challenges gold’s status as the ultimate store of value. At the same time, Bitcoin—often called “digital gold”—is strengthening its position as the world’s hardest asset.

So, what does it mean for Bitcoin and for gold? Well, let’s find out!

“Supergiant” Gold Deposit, Diluting the Value

The discovery of the massive gold deposit was made last month in China’s Hunan Province and was reported by the Chinese State Media.

Interestingly, China is already the world’s largest gold producer, with its gold reserves estimated to be over 2,000 tons as of this year. The world’s second-largest economy also accounted for around 10% of global output last year.

According to the report, geologists found several gold veins in the Wangu gold field. Found 2,000 meters (2 km) deep in the field, they contained a reserve of 300 tonnes of precious metal.  

The exciting part is what was found even deeper. The gold reserves at the site are estimated to be massive 1,000 tonnes within a depth of 3,000 meters. 

“Many drilled rock cores showed visible gold.”

– Chen Rulin, an expert at the Geological Bureau of Hunan Province

He further shared that a tonne of ore in this range contained as much as 138 grams of gold.

The value of the newly discovered deposit is 600 billion yuan or approximately $83 billion. So, it makes sense to be concerned.  If the new discovery ultimately proves to be true, which early examinations point to be potentially in billions of ounces, that would make it the largest gold deposit on Earth.

The thing is, not all gold deposits can be categorized as supergiant. For one to be titled as such, the natural gold collection has to be formed under special conditions, which leads to concentrations that surpass those in typical mines.

As such, the new gold deposits can have a significant impact on not only local economies but also global markets due to gold’s crucial role as a stable asset and a hedge against financial uncertainty.

Notably, this isn’t even the first time such large deposits have been found. Time and again, we have come across discoveries that have unveiled new gold. 

In 2022, exploration surveys showed that Uganda had gold ore deposits of about 31 million tonnes, with a value of an eye-boggling $13 trillion. A Chinese gold mining company, Wagagai, has been granted the license to produce part of these gold deposits. In 2023, the country’s gold exports also surged over 10 times from the previous year to $2.3 billion.

Gold is not only being uncovered in countries, but it has also been found in asteroids. The reports first came in 2019 of asteroid 16 Psyche containing as much as $700 quintillion worth of gold. For context, 1 quintillion has 18 zeros; yeah, you read it right.

So, what does it mean for gold? Well, simple economics says that if supply increases while demand remains constant, it leads to a drop in prices. That means gold isn’t really the hard asset as we have known it to be all this time.

Is Gold’s Status in Danger?

First, let’s get into some introductory economics, which is the fundamental principles of economics — the law of demand and supply.

So, there is an inverse relationship between demand and price while a direct relationship between supply and price. 

What this means is when the demand increases without a change in supply, the price of an asset increases as more people want to buy it, but there’s only a particular amount of it available in the market.

Now, if the reverse happens, i.e., the supply increases, which means there is now more of a particular asset in the market while demand is the same, then it negatively affects the prices.

When demand matches supply, the price is in equilibrium, which is acceptable to both buyers and sellers. What about when both the demand and supply increases? Well, then, the equilibrium price remains the same. 

Now that you know the economics behind the demand and supply, you can understand why there’s always so much discussion surrounding these new gold deposit discoveries. 

We all have known gold to be a finite resource, which means there’s only a certain amount of it on our planet, and even that is harder to find. Data suggests that so far, about 212,582 tonnes of gold has been mined throughout history. Interestingly, only two-thirds of it has been mined in the last about 74 years.

However, as we slowly come to realize, gold is not as finite of a resource as we all knew it to be. As gold deposits of great magnitude are being uncovered, it potentially puts a question mark on gold’s status as a hard asset.

The Hardest Asset on Earth is Bitcoin  

While gold deals with the discovery of new deposits, digital gold enjoys price discovery as it captures the attention of people, corporations, and even nation-states. 

The reason for Bitcoin’s growing popularity is clear:

• Fixed supply
• Full transparency
• Borderless portability

All these are qualities that gold simply can’t match. No doubt, gold has been prized for millennia. But this discovery exposes one of its key flaws: its scarcity is unreliable. New finds—especially of such a large scale—can rewrite perceptions of rarity and value. 

Bitcoin avoids this problem entirely. Its supply is hard-capped at 21 million coins. So, there are no surprises, no technological advancements, no sudden “discoveries.” Its absolute scarcity is built into its very code right from the very beginning.

Then there’s the cost of gold. Extracting it is expensive, slow, and complex. Mining remote deposits require years of work, massive energy inputs, and environmental sacrifice. Transporting and refining it adds further burdens. Bitcoin side steps these limitations.

While Bitcoin is energy-intensive to mine, it exists purely as a digital asset. There is no physical extraction, no need for transport, and no storage headaches. There is also no ecological footprint on the scale of traditional mining.

Verification is another dividing line. Confirming a gold deposit’s size and quality takes time. Bitcoin, in contrast, runs on a public blockchain. As a result, its ownership, supply, and transactions are all verifiable in real time.

Mobility poses another challenge, as gold is bulky by nature. As a result, moving it from one place to another can prove to be slow, expensive, and risky. It’s also not easier to liquidate at the time of need, a problem that Bitcoin solves.

Another sort of challenge that gold poses is geopolitical. Being a physical asset, there is a risk that it might face bans or restrictions and might even be confiscated by governments. There are no such issues with Bitcoin, as its inherent decentralization properties prevent any single party from exercising control over it.

This record-breaking gold find might feel historic. But it also signals a shift. Gold is physical. Its scarcity is uncertain, and value is fragile, whereas Bitcoin is digital, and its supply is fixed with secure value. Bitcoin is fast positioning itself as digital gold, the hardest asset of this century.

Click here to learn all about investing in Bitcoin (BTC).

Bitcoin will Grow, But Gold is here to Stay

Bitcoin, as we have been seeing over the last decade and a half, has come a long way. During this time, the Bitcoin network remained operational, having an uptime of 99.98%. 

Once a fringe asset, the battle-tested decentralized and permissionless BTC has given rise to a $4 trillion crypto industry. 

While Bitcoin has everyone in its thrall, this doesn’t mean gold is doomed. Not at all, actually. Because no matter how much Bitcoin’s prominence as a store of value grows in the coming days, gold will continue to play a crucial role for several reasons. The industry needs it. 

On the technological front, gold is essential—it’s used in devices like smartphones, laptops, and medical equipment. The industry relies on gold because it doesn’t corrode and is the best conductor. As tech usage grows, so will the demand for gold.

Gold also plays a role in medicine. Gold nanoparticles are helping fight cancer, improve diagnostics, and deliver targeted treatments. Thanks to its biocompatibility, gold is also used in surgical tools and implants.

And then there’s aerospace. Satellites and spacecraft rely on gold for protection—it blocks radiation and withstands extreme heat. Without gold, modern space missions—and the global communications they enable—would fall apart.

We can’t forget about gold’s use case as jewelry, either. After all, this use case of the yellow metal accounted for almost half, at 48.7%, amounting to 2,168 metric tons, of global gold demand in 2023. When it comes to using gold for jewelry, medals, and other decorative products, China and India are the ones who lead this consumption.

But there’s more. A prominent use case of gold is wealth protection. With a 23.2% share, investment is the second-most gold-demanding sector. In 2020, the year in which global markets crashed hard due to the COVID pandemic, gold’s use as an investment actually surpassed jewelry.

This isn’t out of the ordinary, though; gold has long been a safe-haven asset that investors turn to during times of crisis, economic uncertainty, and political instability. 

Gold’s investment thesis is driven by the fact that its value remains relatively consistent over time while other asset classes experience massive fluctuations. This lack of volatility in gold price may not make it particularly an attractive asset for investors, especially retail, as a way to grow wealth, but it certainly has a big role to play in wealth preservation.

This is also the reason why central banks hold a significant amount of gold reserves that help them stabilize their own fiat currencies, diversify away from USD, and manage local economic uncertainties. The metal is also pretty liquid, which means it’s easy to trade.

So, as we can see, gold has several ongoing use cases, which should continue to drive demand for this traditional store of value, even if it is supplanted by Bitcoin in time.

Click here to learn all about investing in gold.

Gold or Bitcoin – Why not Both?

Gold is old. It’s the asset investors turn to when markets fall apart because it doesn’t care about stocks, bonds, or tech crashes. For centuries, it’s been the go-to safe haven.

Compared to gold, Bitcoin can be seen as a wild card. It’s new, volatile, and full of potential and is currently hogging all the limelight, as it smashed the $100K barrier to make a new ATH of $108,135, which is an increase of 56.52% from the 2021 peak.

Gold has been making moves, too, due to rising geopolitical tension. At the time of writing, XAU/USD has been trading at $2,637.70 per ounce, not far from its $2,790 peak hit in October this year. At its current rate, the gold price is up 34.65% from its 2021 high. 

It’s natural for investors to look for alternatives in times of uncertainty. Some might choose gold, and those who prioritize growth would opt for Bitcoin. However, there’s a better way: choosing both gold and Bitcoin. 

While gold can act as a traditional way of protecting your wealth from inflation and as a hedge against geopolitical crises, Bitcoin can provide a modern twist to your portfolio, which not only protects your wealth from censorship but also helps it grow substantially.

Up until now, people have been skeptical of adding Bitcoin to their portfolios, but that’s not the case anymore. This is evident in the success of Spot Bitcoin ETFs, which has recorded $36.73 billion in total net inflow within a year, with the total net assets reaching $121.68 billion.

Just recently, the largest asset manager, BlackRock, recommended investing as much as 2% of the portfolio in BTC.

“We see a case for investors with suitable governance and risk tolerance to include Bitcoin in a multi-asset portfolio.”

– A team of BlackRock executives said in a report

This recommendation is supported by the trillion-dollar asset being uncorrelated with other major asset classes and offering a diversified source of return.

It makes sense for investors to make BTC an integral part of their portfolios, as governments are taking this route. While so far, smaller nations like El Salvador and Bhutan are the only ones to take this approach, the upcoming US administration under President-elect Donald Trump may adopt Bitcoin as a reserve asset, too. Such a move would legalize Bitcoin and send it to the stratosphere.

Investing Picks for Bitcoin and Gold Mining

Now, let’s take a look at the prominent names in both sectors that offer a lucrative investing opportunity.

#1. Newmont Corporation (NEM -3.22%)

This gold mining company, which operates mines across North and South America, Africa, and Australia, also produces copper, silver, zinc, and lead. With a market cap of $44.4 billion, NEM shares are currently trading at $39.02, down 5.54% year-to-date (YTD). The company pays a dividend yield of 2.57%.

For Q3 2024, the company reported net income of $924 million and delivered 2.1 million gold equivalent ounces. Meanwhile, $1.6 billion of cash was generated from operating activities, while $760 million was in free cash flow. Newmont aims to deliver up to $1.5 billion in gross proceeds from its non-core divestment program.

During this period, the company repurchased $198 million and authorized an additional $2 billion program that will be executed at the Company’s discretion throughout the next two years.

#2. Marathon Digital Holdings (MARA -5.28%)

This Bitcoin mining company, which operates in North America, has a market cap of $7.7 billion as its shares trade at $23.93, which is up 1.92% YTD. It has an EPS (TTM) of 0.98 and a P/E (TTM) of 24.51.

For the most recent quarter, Mara reported growing its energized hash rate to an ATH of 36.9 exahash after deploying 18,000 new miners, which further increased to 40.2 EH/s in Oct. During this period, the company also added 372 megawatts of mining capacity with an acquisition of a 222 MW site and securing greenfield site development of 150 MW.

Mara mined 2,070 BTC during the quarter and purchased 6,210 BTC while no Bitcoin was sold. Overall, the company now holds 26,842 BTC on its balance sheet, which puts it as the 2nd biggest public company by BTC holdings after MicroStrategy.

Other achievements reported by Bitcoin mining for Q3 of 2024 included submitting a climate-related disclosure report, being recognized by the World Energy Council as a finalist for Energy Technology of the Year, and as a Bitcoin Voter project co-founder playing “a significant role in advocating for pro-crypto candidates” in the US administration. 

Conclusion

As we saw, digital gold, aka Bitcoin, is leading in terms of gaining the masses’ attention and capital flow. The trillion-dollar asset, after all, is better suited for the modern world and its new risks. However, that’s not to say that the traditional safe haven, gold, doesn’t have a role to play in this new age of investment and innovation. After all, gold has survived centuries, and now, just like the yellow metal, Bitcoin has shown its resilience during its relatively short history.

So, the best approach for any investor, regardless of their age and socio-economic background, is to make both gold and Bitcoin a part of their portfolio so that they have double the protection and wealth generation!

Click here for a list of ten reasons to invest in Bitcoin.