In markets flooded with headlines, hot takes, and influencer-driven narratives, it’s easy for complex ideas to get flattened into catchy slogans. Those slogans spread fast – but they rarely hold up under scrutiny.
Cryptocurrency has been a frequent victim of this dynamic. For years, critics have argued that the space is driven more by hype than by substance, while advocates have often leaned too heavily on simple analogies to explain something genuinely new and unfamiliar.
Both instincts miss the point.
Skepticism is healthy. Any serious investor should resist marketing language and shortcuts that substitute narrative for understanding. Capital works best when it’s deployed with clarity – when you understand not just what you’re buying, but why it behaves the way it does and what role it’s meant to play.
That’s especially true with newer asset classes, where borrowed language can obscure more than it reveals.
Which brings us to one of the most common – and most misleading – phrases used to describe cryptocurrency today:
“Digital gold”
A number of people who have promoted crypto have been saying that cryptocurrencies are like gold, only in digital instead of physical form.
Sure, cryptocurrencies typically have limited supplies, like gold, and crypto has privacy and personal control over what you own built into it. As does gold.
But the analogy doesn’t hold up when you look into other details. In fact, Günay Caymaz with Investing.com writes,
While gold and silver continue to set new records during [2025], it is clear that bitcoin’s “digital gold” narrative has not been working in recent times.
Alex Di Pizio with The Motley Fool also notes,
But that [digital gold] thesis fell apart last year when gold and bitcoin went in entirely different directions…
Clearly, notwithstanding the limited supply and decentralization (meaning that it’s harder for governments to control) in common, gold (or any other precious metal) is not the same thing as cryptocurrencies, and they act very differently in the marketplace and in your portfolio.
Which begs the question…
What are each good for?
This is a brilliant first question because if you understand the advantages of each of these investment classes, you can then decide if one or the other (or both) make sense for your goals.
So, to start, why gold or other precious metals?
Most investors who diversify into precious metals do so because they are looking for a hedge against inflation. Precious metals can work well as that hedge because their use in the marketplace for non-monetary purposes give them an intrinsic value independent of what is happening with the value of the dollar.
Throughout history, in fact, precious metals have been used for money precisely because they have value in industry, in jewelry, across a surprisingly large number of practical purposes.
Think of it this way, precious metals have and maintain value because they could be melted down and used in factories (or other industrial uses).
And those who diversify into precious metals typically are looking to provide stability to their portfolio so that they have real value, real purchasing power still in their portfolio even if their other investments don’t pan out so well.
Cryptocurrencies are different
People don’t typically diversify into cryptocurrencies for stability.
In fact, it’s the instability, the risk in crypto, that provides the upside potential that people who diversify into cryptocurrencies are looking for. That risk isn’t a bug; it’s one of the central features and appeals of investing into cryptocurrencies.
So, for people looking for growth potential, crypto can make quite a bit of sense, especially as many coins have developed strong track records of growth over the years.
Most investors, though, take a middle way. They are looking for growth, yes, but they are also looking for stability to offset the risk of that growth. And many smart investors are also looking into ways to hedge against inflation.
So, many investors take a middle path of diversifying into both precious metals and cryptocurrencies.
By doing this, they hope to get the best of both worlds in one portfolio… all while not having too little growth to fund their retirement years or too little stability and risking losing it all (and not sleeping well at night, either).
Of course, depending on their investing goals and on their risk tolerance, different people are going to allocate their dollars in different ratios. A person who wants more upside potential and has less concern for stability would likely put more into crypto and less into precious metals than someone looking for more stability and less risk.
But both would likely continue to invest into both asset categories… along with other asset categories that make sense for their overall investing goals.
So, in short:
Crypto and precious metals are not the same, but they may both make sense to many investors who understand what each asset class offers.
You can find out more about how to diversify into cryptocurrencies in tax advantaged ways by getting our free crypto IRA guide. Alternately, you can open a Digital IRA with BitIRA anytime, day or night, in just a few minutes.
And if you’d also like to find out more about how precious metals could make sense as part of your portfolio to help to provide stability and a hedge against inflation, you can learn more about precious metals IRAs through our sister company, Birch Gold Group.
