Cardone: Bitcoin Beats Gold Despite Metal’s Rally

Gold’s remarkable performance in 2024 has captured investor attention, with the precious metal surging more than 50% and recently crossing the $4,000 per ounce threshold for the first time. This rally has even outpaced Wall Street darling Nvidia, demonstrating gold’s renewed appeal in uncertain economic times. Meanwhile, Bitcoin reached its own milestone, setting an all-time high of $126,000 according to CoinGecko data, with market sentiment strongly favoring further gains. A Myriad market survey found that 60% of respondents believe Bitcoin is more likely to ascend to $140,000 than dip to $110,000, reflecting growing confidence in the cryptocurrency’s trajectory.

Despite gold’s impressive run, Grant Cardone remains steadfast in his conviction that Bitcoin represents the superior long-term store of value. ‘Don’t be stupid,’ Cardone warned investors in an interview with Decrypt. ‘I wouldn’t be chasing this thing right now. For every Bitcoin you sell, you’re going to cost yourself a million dollars.’ His comments reflect a fundamental belief that short-term price movements shouldn’t distract from Bitcoin’s structural advantages, even as investors pile into alternative assets in what analysts have dubbed the ‘debasement trade’ – a strategy aimed at protecting wealth from potential U.S. economic weakness and dollar depreciation.

Cardone’s bullish Bitcoin thesis hinges on what he sees as gold’s vulnerability to technological disruption. He argues that automation, particularly through robotics like Tesla’s Optimus project, could fundamentally alter gold’s scarcity proposition. ‘Once Elon’s Optimus works, you can dig 24/7, 365 with no payroll,’ Cardone explained. ‘The amount of gold we mine is limited to the number of people that can mine it.’ This perspective challenges conventional wisdom about gold’s inherent scarcity, suggesting that reduced labor costs through robotics could increase gold production and potentially diminish its value preservation characteristics.

In contrast, Cardone emphasizes Bitcoin’s mathematically enforced scarcity with its fixed supply of 21 million coins. Projections based on the network’s current rules suggest the penultimate Bitcoin won’t be mined until 2093, creating a predictable and transparent supply schedule. This digital scarcity, combined with Bitcoin’s lack of physical storage requirements and greater spendability, positions it as a more modern store of value according to Cardone. He also draws parallels to real estate, noting that both Bitcoin and property face inherent constraints – digital in Bitcoin’s case, geographical in real estate’s – that protect their long-term value.

While Cardone advocates for Bitcoin’s supremacy, hedge fund innovator Ray Dalio presents a more balanced approach. The Bridgewater Associates founder has urged investors to allocate 15% of their portfolios to a combination of both assets, a recommendation he first made in late July when gold was trading around $3,300 per ounce. Dalio’s position stems from deep concerns about government fiscal policies, warning last month that the U.S. risks a ‘debt-fueled heart attack’ if spending habits aren’t reined in. At the time of his initial recommendation, he noted that rising government debts hadn’t been priced into global markets and expressed a ‘strong preference’ for gold.

Dalio’s reservations about Bitcoin center on its potential limitations as a reserve currency. He has argued that Bitcoin’s lack of privacy makes it unlikely to be adopted by central banks and raised concerns that future changes to Bitcoin’s codebase could make it a ‘less effective’ store of value. This more cautious stance contrasts sharply with Cardone’s enthusiasm, though both investors recognize the importance of holding assets outside traditional financial systems during periods of economic uncertainty and potential currency debasement.

The growing institutional recognition of Bitcoin’s potential is reflected in analysis from investment firm VanEck, which estimates that Bitcoin could capture half of gold’s $26 trillion market capitalization, though this transition may take several years. Bitcoin’s current valuation of $2.4 trillion represents significant growth from $1.2 trillion a year ago, demonstrating accelerating adoption despite gold’s recent outperformance. This potential for market share capture underscores the ongoing evolution in how investors perceive store-of-value assets in the digital age.

Cardone has integrated his Bitcoin conviction into his investment business practices through Cardone Capital, which manages a $5 billion portfolio. The firm has begun mixing real estate and Bitcoin in funds offered to accredited investors, allocating rental income from commercial properties to Bitcoin over time. Interestingly, despite this integration, Cardone has discouraged investors from using their Bitcoin to invest in his real estate projects. ‘I’ve had people come to me and say, ‘Hey, I want to invest Bitcoin into your projects.’ And I’m like, ‘Why would you do that?” he recounted. ‘Why don’t you just keep your Bitcoin and convert some of your cash? I don’t know why someone would get rid of that asset.’ This stance reinforces his view that Bitcoin itself represents a foundational holding that shouldn’t be liquidated for other investment opportunities.