Bitcoin Could Be "Less Volatile" Than Gold and Surpass Its Market Value

• The scarcity of BTC would be an advantage in competing with gold as a store of value.
• Greater market depth could cushion BTC's price movements.

Economist Saifedean Ammous argued that the growth of liquidity and capitalization of bitcoin (BTC) could reduce its price fluctuations in the long term, potentially making it a less volatile monetary asset than gold and larger in size. The author of The Bitcoin Standard defended that the scarcity of BTC is an advantage for its consolidation as money, not an obstacle to its use.

In response to criticisms from Professor Lawrence H. White, Ammous argued that the difficulty of expanding the supply of an asset is precisely one of the characteristics that made gold a dominant money. From his perspective, bitcoin takes that property further because its issuance follows predictable rules and does not depend on the decisions of a central issuer.

The economist considered that a growing demand for bitcoin does not need to translate into an expansion of its supply. Instead, it can elevate its purchasing power and allow its holders to accumulate larger monetary balances. According to his thesis, this process would favor savings, liquidity, and lower volatility as the market matures.

Ammous questioned the idea that the ability to increase supply in response to higher demand is an advantage for money. To illustrate his position, he suggested that if that characteristic were decisive, other metals like copper or iron would have had better conditions to impose themselves over gold as a monetary reserve; an idea that has also been explored by CriptoNoticias.

In his view, the limited expansion of gold reserves contributed to its historical position as money. Bitcoin, whose issuance is subject to predetermined rules, would deepen that characteristic by further reducing the possibility of diluting its supply.

The author also rejected the notion that a higher market capitalization cannot be related to a reduction in volatility. In his response, he cited analyses attributed to Fidelity and Charles Schwab, as well as research on realized volatility, bid-ask spreads, and BTC liquidity, which would point to a decrease in fluctuations over time. The realized volatility of Bitcoin over one year has shown a downward trend as the market matures. Source: @saifedean / X

In the analysis, he argued that greater market depth can help absorb trades without causing such pronounced price movements. However, that evolution does not guarantee that volatility will continue to decrease nor that bitcoin will become more stable than gold, as we also explained in CriptoNoticias.

Another central point of his argument is that holding BTC also constitutes a way of using it as money. For Ammous, those who hold the asset with the purpose of preserving their purchasing power for future expenses are accumulating monetary balances, even if they do not use it habitually to pay for goods and services.

Therefore, he considers it premature to demand widespread adoption of bitcoin as a means of payment before recognizing its monetary advancement. In his response, he estimated that BTC represents about 1% of global cash balances and argued that it still has room to grow.

This stance contrasts with that of White, who questions whether an asset with strong price fluctuations can offer the necessary predictability for everyday exchanges. The professor also highlighted the competition from stablecoins, designed to maintain a stable value and used to transfer units linked to fiat currencies.

Ammous responded that the transaction volume of stablecoins primarily reflects the use of dollars through new transfer channels and does not demonstrate that bitcoin needs a flexible supply.

His forecast is that the progressive monetization of BTC will boost its liquidity, reduce its volatility, and expand its valuation until it surpasses that of gold. This is an expectation about the future evolution of the asset, not a confirmed outcome. The pace of adoption, demand, and market conditions will be decisive in assessing whether that scenario materializes.

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