Gold and Bitcoin: A Quantitative Comparative Analysis

Abstract

This study investigates the relationship between two of the most important assets in the modern market, Bitcoin and gold. While gold has historically been considered a safe-haven asset, Bitcoin has emerged as a new digital alternative to gold. Using daily data from 2014 to 2025, the study applies a purely quantitative comprehensive mathematical framework that includes risk and return analysis, correlation analysis, regression models, granger causality tests, cointegration analysis, vector autoregression and impulse response functions. The results indicate that Bitcoin is a poor alternative to gold for central banks and hedgers, and a successful substitute for gold for speculators and investors, providing higher returns at a higher risk. Furthermore, even though correlation is low, investors may achieve substantial return by focusing on short term market shocks. One of the important results also include that a significant change in Bitcoin price may influence the price of Gold, but changes in the latter do not impact the former. In conclusion, the study recommends the use of Bitcoin and Gold as complements, not as substitutes.