Digital gold" refers to cryptocurrencies, particularly Bitcoin, as they share similarities with physical gold, including serving as a store of value and a hedge against inflation. Bitcoin's capped supply of 21 million coins creates scarcity akin to gold, while its decentralized nature allows for resistance to government interference. Unlike gold, Bitcoin's divisibility enables easy transactions, and its high liquidity allows for 24/7 trading on exchanges. Being entirely digital, cryptocurrencies can be transferred electronically, offering advantages in a digital economy. However, they are notably more volatile than gold, presenting risks for investors. As an emerging asset class, Bitcoin is increasingly attracting institutional interest and portfolio diversification. Overall, while digital gold shares characteristics with physical gold, it also presents distinct features and challenges.
