First, let’s say right away that the average volatility of gold historically has nothing to do with the sometimes exaggerated volatility of bitcoin.
For example, analyzing the last five years of the gold price trend in U.S. dollars, we find that there has been an overall increase in value of 77%, while for bitcoin it is an incredible +6,388%.
Therefore, a direct comparison between the growth percentages would not be particularly fair. Gold is valued for its stability, bitcoin for its volatility.
However, we can for example compare the relative performance of 2020 with that of previous years.
During 2020, gold appreciated by 24%. For the precious metal this is a significant performance, especially when compared with that of previous years.
Actually, in 2019 the appreciation was essentially the same, but the previous year the price fell by 4%. In 2017, on the other hand, the increase was 13%, and in 2016 it was 8%.
Therefore, the sequence of the last five years regarding the annual trend of the price of gold has been this: +8%, +13%, -4%, +24%, +24%.
This is a relatively steady trend, with the exclusion of 2018.
For bitcoin, on the other hand, things are very different.
This year the increase has been remarkable, amounting to 288%. That is, in a single year it has increased in value almost four times more than gold has in the last five years.
Last year it was 78%, but in 2018 it made a loss of 75%. In fact, by the end of 2017, the last major speculative bubble had formed and burst as of December 18 of that year.
However during 2017 the increase was an impressive 1,500%, while the previous year it was 131%.
Therefore, the sequence of the last five years regarding the annual performance of the price of bitcoin was as follows: +131%, +1,500%, -75%, +78%, +288%.
Bitcoin vs gold: annual performance comparison
Comparing this sequence with that of gold clearly shows how both are characterized by a single year of losses, 2018. But in fact this is the only analogy.
What stands out the most are bitcoin’s incredible performance in 2020, and especially in 2017, compared to the average of the other years.
Specifically while gold in 2020 grew as much as it did in 2019, bitcoin on the other hand did enormously better.
Sure, BTC in 2020 recovered the losses of 2018, returning to the levels of late 2017, but given the remarkable growth it had in 2017 the performance of 2020 can by no means be dismissed simply as a recovery of losses.
For gold, on the other hand, the path is just different, although the alternation of plus and minus signs has been the same.
After all, 2020 and 2019 went simply a bit better than 2017, and the losses in 2018 were definitely limited.
In other words, gold price 2020 was definitely good, but within the norm, while bitcoin’s was excellent, if not the best year ever.