Gold prices have surged to record highs in recent months, breaking $2,700 per ounce and drawing attention from investors worldwide. Yet despite this impressive rally, Tulane University finance professor Peter Ricchiuti remains notably skeptical about gold’s long-term investment potential compared to alternatives like Bitcoin and traditional stocks.
I’ve been tracking this divergence in expert opinion carefully. While many investors flock to gold during periods of economic uncertainty, Ricchiuti’s contrarian stance highlights a fundamental debate in today’s financial landscape: does gold still deserve its status as the premier safe-haven asset in an increasingly digital economy?
“Gold has become the pet rock of investments,” Ricchiuti told Business Insider in a recent interview. “It pays no dividends, and it just sits there.” This blunt assessment challenges the traditional view of gold as an inflation hedge and store of value—a perspective that has driven its recent price surge amid economic concerns.
The gold rally has been fueled by several factors, including Federal Reserve rate cuts, geopolitical tensions, and central bank buying, particularly from China. With the Fed cutting rates by 50 basis points in September and signaling more cuts ahead, gold has benefited from the decreasing opportunity cost of holding non-yielding assets.
However, Ricchiuti points to gold’s historical performance as reason for caution. “Even with the recent run-up, gold has only averaged about a 3% annual return over the last 30 years,” he noted. “When you factor in inflation and potential storage costs, the real return is minimal.”
This performance pales in comparison to the S&P 500, which has delivered average annual returns of approximately 10% over the same period. For investors with a long-term horizon, this difference in compounded returns is substantial.
Bitcoin presents an interesting counterpoint in this discussion. The cryptocurrency has outperformed gold significantly over the past decade, despite its notorious volatility. While gold has risen about 80% since 2014, Bitcoin has surged more than 10,000% in the same timeframe, despite multiple boom-bust cycles.
“Bitcoin is increasingly being viewed as ‘digital gold’ by younger investors,” explains cryptocurrency analyst Maya Chen at Digital Asset Research. “It shares gold’s scarcity principle but adds programmability and ease of transfer that gold simply cannot match.”
The comparison isn’t perfect, of course. Bitcoin’s shorter history and extreme price swings make it a riskier proposition. Gold’s 5,000-year track record as a store of value provides a stability that no digital asset can yet claim.
Central bank behavior further complicates the picture. According to the World Gold Council, central banks added 1,037 tonnes of gold to reserves in 2023, the second-highest annual total on record. China alone has added over 300 tonnes to its reserves since late 2022.
“Central banks don’t buy stocks or Bitcoin—they buy gold,” points out James Steel, chief precious metals analyst at HSBC. “This institutional demand creates a floor for prices that other assets don’t have.”
For retail investors weighing gold versus Bitcoin for 2025, the decision involves balancing traditional safety against potential growth. Gold offers stability and tangibility but limited upside. Bitcoin provides explosive growth potential but with corresponding risk.
The macroeconomic environment will likely prove decisive. If inflation persists above target levels or geopolitical tensions escalate, gold’s traditional safe-haven status could drive further gains. Conversely, if the Fed achieves a soft landing and economic growth remains steady, stocks and potentially Bitcoin might outperform.
Ricchiuti remains firmly in the stocks-over-gold camp. “Companies create value. They produce things, employ people, and generate profits,” he emphasized. “Gold just sits in a vault.”
For those still drawn to precious metals, Ricchiuti suggests considering gold mining stocks instead of physical gold or gold ETFs. “At least mining companies pay dividends and have the potential to increase production and efficiency,” he noted.
As we look toward 2025, the gold versus Bitcoin debate reflects broader questions about how we define value in the modern economy. Is intrinsic value found in physical assets with historical precedent, or in technological innovation and network effects?
The answer likely depends on individual investment goals, time horizons, and risk tolerance. What’s clear is that the financial landscape is evolving, challenging even our most fundamental assumptions about safe-haven assets.
For now, gold continues its glittering rally while Bitcoin pushes toward mainstream adoption. Whether either proves the superior investment by 2025 remains to be seen, but Ricchiuti’s skepticism serves as a valuable counterpoint to gold’s current momentum.
