What differences were there in 2020 between the evolution of the price of gold and that of bitcoin?
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 US dollars, we find that there have been an overall increase in value of 77%, while for bitcoin it was an incredible + 6.388%.
Therefore, a direct comparison between growth rates would not be particularly fair. Gold is valued for its stability, bitcoin for its volatility.
However, we can compare, for example, the relative performance of 2020 with that of previous years.
During 2020, gold appreciated 24%. For the precious metal, this is a significant return, especially when compared to previous years.
In reality, 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 with respect to the annual trend of the price of gold has been as follows: + 8%, + 13%, -4%, + 24%, + 24%.
This is a relatively constant trend, excluding 2018.
For bitcoin, on the other hand, things are very different.
This year the increase has been remarkable, up to 288%. In other words, in a single year it has increased in value almost four times more than gold in the last five years.
Last year it was 78%, but in 2018 it posted a loss of 75%. In fact, the last massive speculative bubble had formed in late 2017 and burst on December 18 of that year.
As such, during 2017 the increase was an impressive 1,500%, while the previous year it was 131%.
Therefore, the sequence of the last five years in terms of the performance of the annual 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, it is clear that both are characterized by a single year of losses, 2018. But in reality this is the only analogy.
What stands out the most is the incredible performance of bitcoin 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 performed vastly better.
Clear, BTC in 2020 recovered the losses of 2018, returning to late 2017 levels, but given the remarkable growth it had in 2017, the 2020 performance can by no means be dismissed simply as a recovery from losses.
In contrast, for gold the path is quite different, although the alternation of the plus and minus signs has been the same.
After all, 2020 and 2019 were just slightly better than 2017, and losses in 2018 were definitely limited.
In other words, the price of gold in 2020 was definitely good, but within the norm, while the bitcoin price was excellent, although not the best year ever.