Crypto assets are no longer on the fringe of the financial system. So says the IMF, which pointed out in a recent blog that the likes of bitcoin have matured from an obscure asset class with few users to an integral part of the digital asset revolution.

Millions of investors have been swept up by the enthusiasm for crypto, not least many retail savers lured by its surging prices. Some claim that in the post-pandemic world bitcoin could even displace gold as investors’ asset of choice to address extreme risks, price instability and geopolitical turmoil of the kind exemplified by Russia’s invasion of Ukraine. As Tyler Winklevoss, a tech entrepreneur, put it: “Our basic thesis for bitcoin is that it is better than gold.”

Yet investors should be wary of such assertions given gold’s pedigree going back thousands of years. The comparison is easily made but, as I will argue, not necessarily justified. And the question cannot be resolved by mere financial calculus. Historical and cultural factors will play a part in perceptions of the relative merits of the two assets.