The difference is that with gold, there's an actual intrinsic demand backing it. There's a cultural demand (indian weddings) but also a real industrial use for

The difference is that with gold, there's an actual intrinsic demand backing it. There's a cultural demand (indian weddings) but also a real industrial use for gold. There is zero use for bitcoin outside of the financial context. The US Dollar is backed by the united states government and economy, and enough people have faith in both to confer present value and future value. There was a massive effort to introduce a new currency backed by physical silver (by the Hunt brothers), which never gained much traction despite the cash thrown at it. Right now the people investing in bitcoins are speculating that they will stay. For them to stay, there needs to be confidence that it will retain some sort of value, and the early people are at best described as speculators (no one is betting the farm on BTC).