US Money Reserve Identifies Key Ways Cryptocurrencies Differ from Gold
Listen to this articleGold has maintained intrinsic value for thousands of years, which has prompted millions of portfolio holders to make it part of their savings plan.
Many view the precious metal as an asset that can provide protection during difficult times because of its overall performance, according to U.S. Money Reserve President Philip N. Diehl, who served as the 35th Director of the U.S. Mint.
“Gold really has played that role — not just over the last 100 years in the U.S., but across history,” Diehl says. “Oftentimes, it has been the only form of wealth insurance; gold has been viewed that way in the American marketplace and the world marketplace ubiquitously.”
Over the last three decades, while some assets such as stocks experienced periodic volatility, gold’s price has remained fairly steady or increased — rising from $388 per ounce in November 1993 to more than $2,700 per ounce in 2024, as shown by the price charts on U.S. Money Reserve’s website.
Gold performed well throughout that period despite challenges such as the dot-com bubble bursting; the September 11, 2001, attacks; conflict in the Middle East; and the COVID-19 pandemic. The precious metal has also performed well during periods of economic growth — something Diehl says is important to note.
“There were some really good economic times during that period,” Diehl says. “Gold rose throughout those times as well as in the hard times. It’s important for us to recognize that and not oversell gold as just a ‘bad news’ investment.”
A Growing Demographic
Currently, a considerable number of young portfolio holders are expressing an interest in gold, Diehl says.
A 2024 Bank of America Private Bank survey, for example, found that while 41% of wealthy individuals either own or are interested in owning gold, an even larger percentage of high-net-worth investors age 21 to 43 — 45% — possess physical gold as an asset. An additional 45% of wealthy individuals in this age group say they’d like to purchase the precious metal.
“There’s increasing evidence that millennials and Generation Z are looking at gold much more seriously than Generation X and boomers did at a similar stage of life,” Diehl says. “They like the idea of something more reliable that they can depend on compared to what crypto represents.”
The cryptocurrency market, in recent years, has had pronounced ups and downs, which can make navigating it nerve-wracking, Diehl says — and potentially financially risky, depending on an individual’s stage of life.
“If you’re 30 years old and you put money into crypto, you have time to recover from big drops in prices like those we’ve seen,” Diehl says. “But if you’re older and are counting on a cryptocurrency to provide a portion of your retirement, and it loses 50% of its value in a matter of months, you may not be in a position where you can wait for a recovery — if one ever comes.”
Gold, on the other hand, is often considered to be a store of wealth, Diehl says.
“If you look at a graph of crypto prices, you’ll see that crypto is a highly speculative asset class,” Diehl says. “Crypto has a track record of maybe 15 years, whereas gold has a track record of 3,000 years — it’s just a totally different kind of value proposition.”
