Galaxy Digital’s head of research, Alex Thorn, pushes back on growing criticism that Bitcoin has “failed” in its promise of digital gold, arguing that the label has always been about the monetary properties of BTC, not a guarantee that it will trade like bullion in every macro system.
In a post on “When Bitcoin traders said ‘digital gold,’ they were describing its fundamental characteristics, not that it has the high beta of gold today,” he wrote, adding: “It comes from Satoshi.”
To illustrate this point, Thorne shared a screenshot of a 2010 Bitcointalk exchange, where Satoshi Nakamoto demonstrated a thought experiment on money emerging from scarcity as well as transferability.
“Imagine a rare base metal like gold but with the following properties: a dull gray color, not a good conductor of electricity, not particularly strong, but not ductile or malleable either, and not useful for any practical or decorative purpose,” Satoshi wrote. “And there is a special magical property: it can be transferred via a communications channel. If it gains any value at all for whatever reason, anyone willing to transfer wealth over a long distance can buy some of it, move it, and then have the recipient sell it.”
Thorne’s framing is that the “digital gold” metaphor is rooted in this passage: Bitcoin resembles a rare commodity in its key monetary properties, while adding a feature that physical metals cannot match, namely, native global portability over telecommunications bars.
Bitcoin’s ‘digital gold’ narrative as a gap trade
Thorne argued that Satoshi’s point was not that the market should price Bitcoin in close relation to gold at all times, but that Bitcoin’s structural features could support a gold-like monetary role if the market eventually converged on that valuation. According to Thorne, the investment thesis is the difference between “gold-like fundamental characteristics” and the market’s willingness to price Bitcoin alongside gold and potentially narrowing that spread.
He described Bitcoin’s fundamental profile in terms typically cited by long-term holders: scarcity and durability, with additional monetary attributes like divisibility and self-sovereignty, and then pointed to portability as the differentiating factor that makes the measure more than just a brand. “Alpha,” in this context, is not a short-term co-movement with bullion, but the probability that the market will eventually price Bitcoin more like a fiat metal.
The exchange received approval from 10T Holdings founder Dan Tapiero, who responded: “Well said.” Tapiero also noted that the current mood around Bitcoin feels like a reset of a familiar cycle: “There’s a lot of fear on Bitcoin. Like the good old days again.”
Not everyone accepted this hypothesis. One user replied: “It was never traded like gold. The fact that people described it as gold doesn’t mean it’s true.” “That’s literally what I’m saying in this post,” Thorne replied, emphasizing that his argument is specifically that “digital gold” was never a promise of consistent, gold-like trading behavior.
Thorne also downplayed the idea that anything physical has changed recently about Bitcoin itself. “Fundamentally nothing has changed regarding Bitcoin over the past five months,” he wrote, adding that “if anything, the fundamentals have become more attractive.”
At press time, Bitcoin was trading at $68,048.
Featured image created with DALL.E, a chart from TradingView.com
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