They point out that Bitcoin has these advantages because of its absence of reliance on physical supply chains.
While the document claims that “Bitcoin and gold are fundamentally similar as scarce and globally accessible units of value,” Coinbase highlights that supply shortage of gold in the recent past, primarily due to the impact of coronavirus pandemic, has proven better worldwide accessibility of Bitcoin.
Coinbase contends that the Covid-19 pandemic has brought the advantages of BTC over gold to limelight, emphasizing that “Bitcoin does not rely on fragile physical supply chains and is truly globally accessible.”
The cryptocurrency exchange cites the price gaps recorded by gold of late and explains interruptions to supply chains happen in dissimilar levels of shortage across various markets.
The report points to nearly 4.5% change in the price of yellow metal in New York and London. This variations are due to non-availability of gold bars that are used for settlement of Comex future contracts.
The document further states that the Perth Mint in Western Australia has boosted production of gold kilobars to fulfill dearth of supply, with a minimum of 11,000 bars being transported to New York.
Coinbase points out that while “gold refineries, miners, and supply chains have been disrupted, Bitcoin’s core protocol continues to function as designed” — with hash rate of Bitcoin once again reaching historical highs in the last few days.
Additionally, the report emphasizes that “Bitcoin will be approximately as scarce as gold,” while offering additional advantage of teleportability.
“Bitcoin’s rate of new supply is ~3.6% per year and will soon drop to ~1.7% on May 12th, setting it on par with gold’s historic scarcity. As gold miners and refineries have gone offline, Bitcoin’s global mining ecosystem seems resilient according to hash rate measurements in recent days.”
Coinbase has also pointed out that Bitcoin markets have recorded year-to-date gains of 20% and 12%, respectively.