Can Bitcoin topple gold as India’s go-to store of value?

On 22 May 2010, this Florida-based programmer received two large pizzas from a Papa John’s outlet. And etched his name into history books.

Why? Because Hanyecz used 10,000 Bitcoins for the meal, making it the first documented real-world transaction using cryptocurrency.

But more mind-bending are its financial dimensions. The 10,000 Bitcoins, which were worth around $40 back then, are now valued at a whopping $1.2 billion. If only Hanyecz had skipped dinner that night!

No other asset has traversed the full arc from ridiculed to resisted to revered as swiftly as Bitcoin. And none polarises opinion so sharply. Once dismissed as a fringe novelty designed to appeal to basement-dwelling coders and secrecy-minded criminals, Bitcoin is now among the most keenly tracked assets in global finance today.

While geopolitical upheavals, fanciful valuations, and corporate earning headwinds have cast a long shadow over financial markets over the past year, and fuelled a generational bull run in safe haven assets like gold and silver, Bitcoin has outshone them all.

In fact, many of the forces driving the yellow metal higher have also powered the rally in Bitcoin, a scarcely believable pairing of the world’s oldest store of value and its youngest challenger. Not bad for an underground decentralized token which was born in 2009 as a result of a white paper on blockchain technology authored by a yet-to-be-identified developer.

Once considered as pure speculation by the financial world, Bitcoin is increasingly being viewed by many participants as ‘digital gold’ for the 21st century, though its periodic bouts of hyper-volatility, including one last week, continue to feed its legions of critics and strike the fear of God into the hearts of investors.

But with its multi-year rally defying every stark prognosis, the question is no longer whether Bitcoin has earned its place in the global financial architecture—it’s whether Indian investors can afford to ignore it any longer.

Blockchain blockbuster

Indian benchmark indices have delivered zero returns over the past year. The pain in small-cap and mid-cap indices is greater, as a result of which most individual portfolios are drenched in 50 shades of crimson.

In contrast, gold is experiencing a proverbial gold rush, surging around 55% in the last 12 months in dollar terms to reach its lifetime high of $4,000 per ounce last week. Spot rates for 10 grams of 24 carat gold have breached ₹1,25,000 in India. Silver has performed even better and has crossed ₹1.50 lakh/kg in the domestic market. But one asset which is surprising everyone is Bitcoin.

While Donald Trump’s latest tariff salvo on China has triggered a violent selloff in Bitcoin, it is still up around 90% over the past year in dollar terms.

“Bitcoin’s performance over the past year, particularly amid heightened geopolitical tensions and macro uncertainty, reflects its growing maturity as an asset,” Sumit Gupta, co-founder of leading crypto trading platform CoinDCX, told Mint.

This builds on its remarkable long-term performance. From trading below $1,000 in 2017 to crossing an all-time high of $125,000 in 2025, Bitcoin has consistently demonstrated its ability to dumbfound naysayers.

“This year’s rally underscores Bitcoin’s resilience amid global macro uncertainty and its growing recognition as a long-term store of value,” Gupta added.

For centuries, it is the yellow metal which has performed this role of long-term store of value. Yet, amid the current flight to safety trend coursing across global markets, it is easy to forget gold’s checkered past.

Between 1978 and 1980, gold prices more than tripled amid oil shocks and Middle East tensions, only to plunge over 60% in the next two decades. After a long bull run, gold collapsed nearly 30% in 2013, leading many to proclaim the “end of the age of gold.” Even during the pandemic years, it wobbled: initial gains faded as mining disruptions eased and a surging dollar undercut demand, leaving 2021 as its weakest finish since 2015, before record central bank purchases restored gold’s shine.

Bouts of extreme volatility. Limited supply. Lack of counterparty risk. Unabated demand. Sounds familiar?

Gold 2.0

Following its launch in 2009, Bitcoin gained early traction as a niche digital payment tool, often associated with underground markets such as Silk Road. Its use for online and in-game transactions, coupled with extreme price swings and limited real-world utility, meant that early holders (or HODLers in crypto lingo) typically viewed it as a counterculture movement against the debasement of fiat currencies rather than a proper investment.

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The 2010s tested Bitcoin’s resilience. After Silk Road’s closure by the FBI in 2013 and China’s crackdown on crypto mining the same year, confidence in digital currencies plunged, ushering in the first “crypto winter.” The 2014 collapse of Mt. Gox—then the world’s largest crypto exchange— deepened the distrust. Yet, despite repeated setbacks, adoption slowly expanded as investors began to view Bitcoin less as a novelty and more as a new asset class.

In 2021, Bitcoin achieved a milestone when El Salvador became the first nation to adopt it as legal tender, and triggered a fierce global debate on whether cryptocurrencies could coexist with fiat systems. Many companies, including Tesla, MicroStrategy and Block Inc, founded by Twitter co-founder Jack Dorsey, hold Bitcoin as part of their treasury diversification strategies.

In January 2024, Bitcoin’s legitimacy received its biggest boost when the US markets regulator Securities and Exchange Commission (SEC) approved spot Bitcoin exchange-traded funds (ETFs), including those from financial heavyweights like BlackRock, Fidelity, and VanEck.

In March this year, US President Donald Trump signed an executive order establishing a strategic Bitcoin reserve, comprising tokens seized in criminal and civil forfeiture cases. It marked the first time Bitcoin was formally recognized as a US reserve asset.

In March this year, US President Donald Trump signed an executive order establishing a strategic Bitcoin reserve, comprising tokens seized in criminal and civil forfeiture cases.

While no global central bank owns Bitcoin as of now, Czech central bank governor Ales Michl, earlier this year, said it will consider holding billions of dollars worth of bitcoin in its reserves. The idea of a Western central bank owning Bitcoin would have been blasphemous just a few years ago. But not anymore.

If anything, consensus seems to be swiftly shifting to the other end of the spectrum. In a note last month, Deutsche Bank Research Institute said it sees Bitcoin being included in central bank reserves within this decade.

Gold and Bitcoin share many fundamental characteristics. Both are scarce due to limited supply, with Bitcoin’s code capping supply at 21 million coins. They are also independent from routine monetary policy, as neither is directly issued by a government, which is why some observers view Bitcoin as a potential diversification tool for treasuries and central banks seeking alternatives to dollar-centric reserves.

While the US dollar remains the top currency in central bank reserves (57%), there are signs that countries are seeking to diversify. For example, China’s holdings of US treasuries fell by $57 billion to $759 billion in 2024.

“Ultimately, Bitcoin and gold will continue to co-exist in the medium term, with gold maintaining its lead in official reserves and Bitcoin expanding in private and alternative reserves,” Deutsche Bank Research Institute stated. “The important question is how much longer gold retains its first-class status as authorities seek alternative currencies to shore up their reserves.”

Additionally, at a time when crypto legislation and innovation is accelerating, Bitcoin seems to be on its way towards mass adoption.

Crypto capers

India’s tryst with crypto began in the early 2010s when Bitcoin first captured global attention. The Reserve Bank of India (RBI) issued its first cautionary statement in December 2013, warning users of virtual currencies about their potential security risks. It was the first official signal of the central bank’s skepticism, and set the tone for India’s cautious regulatory stance towards this ‘rebel’ asset class.

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In the following years, homegrown exchanges such as CoinDCX, ZebPay, and WazirX introduced Indian investors to the possibilities of digital assets. However, in April 2018, the RBI issued a circular barring banks and other regulated financial entities from providing services to crypto businesses, effectively cutting off access to the traditional financial system. Relief came in March 2020, when the Supreme Court overturned the RBI circular, calling the move “disproportionate.”

In 2021, the ministry of corporate affairs mandated companies dealing in virtual currencies to disclose their crypto holdings and transactions in annual financial statements. Later that year, a draft law—the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021—was introduced, seeking to ban “private cryptocurrencies” while paving the way for an official central bank digital currency (CBDC). Although the bill did not pass, it demonstrated the government’s desire to establish a clear regulatory perimeter.

The union budget of 2022 marked a decisive moment. Finance minister Nirmala Sitharaman introduced a taxation framework for virtual digital assets (VDAs), effectively recognizing cryptocurrencies as taxable assets even while denying them the status of legal tender. Under this regime, income from the transfer of VDAs such as Bitcoin, Ethereum, and NFTs attracts a flat 30% tax, plus applicable surcharge and cess. No deductions are allowed other than the cost of acquisition, and losses from crypto cannot be offset against other income or carried forward. In addition, a 1% tax deducted at source (TDS) applies to VDA transactions above ₹10,000 ( ₹50,000 for specified persons).

However, these are among the most stringent tax provisions globally, and domestic players have repeatedly called for bringing them at par with other asset classes like equities and real estate.

India now has about 119 million crypto holders, representing nearly 12% of the country’s population. Adoption is driven by a young, digitally native audience, with 44% of investors aged between 26 and 35.

“While the current 30% tax and 1% TDS present short-term challenges, long-term investors can adopt accumulation-based strategies instead of frequent trading to mitigate repeated deductions,” Vikas Gupta, country manager at crypto exchange Bybit, told Mint. “It’s also essential to stay informed about policy developments, as India’s regulatory stance is expected to mature in alignment with G20 and FATF frameworks, potentially paving the way for a more investor-friendly environment,” he added.

In March 2023, India took another significant step by bringing crypto activities under the Prevention of Money Laundering Act. This required all crypto exchanges and service providers to register with the financial intelligence unit–India and adhere to strict know your customer and anti-money laundering norms.

Despite the regulatory overhang, the crypto space has seen robust growth in India.

According to data provided by India Crypto Research, India processed roughly $269 billion in crypto transactions between July 2022 and June 2023, which dropped to about $150 billion during July 2023–June 2024 as domestic taxes reshaped behaviour. However, volumes rebounded to an estimated $300 billion in July 2024–Jun 2025. This puts India at the top of APAC region in 2025, contributing over 13% of the region’s trading volume.

India now has about 119 million crypto holders, representing nearly 12% of the country’s population. Adoption is driven by a young, digitally native audience, with 44% of investors aged between 26 and 35. The trend is concentrated in key urban hubs, with Delhi, Bengaluru, and Mumbai accounting for about 27% of all Indian crypto holders.

Dos and don’ts

It’s hard to find an asset as polarising as Bitcoin. For crypto crusaders, a $1 million price tag is inevitable, while its detractors insist its true value is zero.

Investing legend Charlie Munger famously compared cryptocurrencies to “turds”. Warren Buffett too has repeatedly said Bitcoin is a non-productive asset with no intrinsic value. To which crypto faithfuls counter, so is gold.

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Without wading into metaphysical debates about intrinsic value and financial epistemology, one thing is certain—crypto investing carries risks that extend well beyond traditional assets. Firstly, as a decentralized token, the inability to cancel or revert transactions can take some time getting used to.

Most investors depend on exchanges or wallet providers for safekeeping their assets. These intermediaries remain vulnerable to hacks, fraud, and operational lapses. The crypto industry has witnessed a series of spectacular heists and exchange collapses that have wiped out billions. In the absence of government-backed insurance or regulatory safeguards, platform failures can result in total loss of funds.

“For retail investors, our advice is they must use regulated and compliant exchanges, prioritizing platforms that provide proof-of-reserve transparency, and storing significant holdings in hardware or cold wallets,” CoinDCX’s Gupta said. “Additionally, investors are advised to enable multi-factor authentication, and remain vigilant about security best practices.”

Then there are the legendary price swings. Bitcoin, despite reaching a market cap of over $2.3 trillion, accounting for over half of the total crypto market capitalization, has a propensity to behave like a meme stock.

For instance, in December 2017, it surged to nearly $20,000, only to halve within five days and crash over 80% the following year. This was worse than the dotcom bubble’s 78% collapse. Just last week, Trump’s announcement of an additional 100% tariff on Chinese imports triggered an over 8% plunge in Bitcoin, leading to many heavily leveraged investors being decimated overnight.

Indian investors also have to contend with the onerous tax burden and regulatory grey areas.

“While India’s current taxation regime is undoubtedly restrictive, Bitcoin’s global adoption and strong fundamentals make a compelling case for strategic, long-term exposure. For Indian investors, even a small allocation—executed transparently and compliantly—can offer diversification benefits,” Himanshu Maradiya, founder and chairman of crypto platform CIFDAQ, told Mint.

Bitcoin, despite reaching a market cap of over $2.3 trillion, accounting for over half of the total crypto market capitalization, has a propensity to behave like a meme stock.

While last week’s selloff has been sudden and punishing, Bitcoin’s bounce backs too tend to be swift and spectacular. Which means timing this particular corner of the market is nearly impossible.

“Rather than chasing momentum, investors should focus on staggered entries through systematic investment plans or tactical allocations aligned with risk appetite. Prudent portfolio sizing and a long-term view are key,” Maradiya added.

From a portfolio perspective, Bitcoin often exhibits low correlation with conventional asset classes, offering diversification benefits.

CoinDCX’s Gupta expects Bitcoin to reach $145,000–$150,000 by the end of the year, with possible short-term corrections or profit booking along the way. He also foresees Bitcoin potentially surpassing gold in total market cap sooner than later, as investor confidence and institutional adoption continue to strengthen globally. The total market capitalization of gold is estimated at $28 trillion currently.

That said, experts urge investors to exercise caution and not forget the virtues of diversification.

“Retail participants should view crypto as a high-risk, high-reward asset class—one that complements, rather than replaces, traditional investments. Allocating a small portion of one’s portfolio can provide exposure to the future of digital innovation without jeopardizing financial stability,” Bybit’s Gupta said. “Ultimately, the key lies in education, disciplined risk management, and patience.”