A Benzinga Debate On Federal Reserve Assets: Our Contributors Speak On Gold, Bitcoin

Benzinga is pleased to announce the conclusion of our highly anticipated debate on the topic: 

Gold vs. Bitcoin: Which is the better reserve asset and why?

Our contributors truly rose to the occasion, offering thought-provoking perspectives and compelling arguments throughout the discussion. This engaging exchange has provided valuable insights into the strengths and challenges of both assets, sparking meaningful dialogue about their roles in the future of financial strategy. 

Participants:

Dr. John Alexander Sinclair: The founder of Positive Trends Research and the director of Options & Derivatives Education.

Julia Khandoshko: The CEO of Mind Money, a leading European investment technology and financial engineering hub.

Kadan Stadelmann: The Chief Technology Officer, Komodo Platform, a blockchain developer, and operations security expert. 

Read on for a comprehensive summary of the debate and the key takeaways that emerged.

Gold Vs. Bitcoin: Which Is The Better Reserve Asset And Why? Experts Weigh In

The recent announcement of government-backed crypto reserves by President Trump has sparked significant debate about the future of digital currencies as reserve assets and Bitcoin's viability as a reserve asset is an evolving theme in the discussion.

Bitcoin is long seen as a hedge against inflation but its price volatility has hindered its adoption as a stable reserve asset.

With the introduction of crypto reserves by the U.S. Government – Bitcoin’s legitimacy could be enhanced in the global economy. But will this make Bitcoin a safer reserve asset, or will its volatility continue to undermine its reliability? A new administration in four years could possibly dissolve the crypto reserve, so what are the guarantees?

On the other hand, Gold has maintained its status as the cornerstone of global reserves due to its stability, limited supply, and intrinsic value. But the shiny, yellow metal does have significant drawbacks when used as a reserve asset, including limited growth potential, lack of income generation, and vulnerability to theft among other concerns.

Senator Cynthia Lummis has proposed legislation aimed at leveraging gold certificates stored in the Federal Reserve’s 12 banks to finance future bitcoin purchases. So, is selling gold to buy Bitcoin a good idea?

We turned to our contributors for opinions and analysis. They rose to the challenge with their nuanced perspectives…

John Alexander Sinclair sees Bitcoin as a stronger reserve asset. While acknowledging Gold’s historical role as a store of value, Dr. Sinclair cites its physical limitations—transport, storage, and divisibility—that contrast sharply with Bitcoin's advantages in a digital world.

"Bitcoin is decentralized, portable, and censorship-resistant, making it an ideal hedge against financial instability and government intervention. Unlike gold, Bitcoin can be moved globally in seconds, providing a level of liquidity unmatched by any other asset," argues Sinclair. 

Julia Khandoshko perceives Bitcoin as a high-potential but dependent asset. "It is a relatively new asset class that has shown remarkable growth and volatility. Bitcoin's decentralization and fixed supply make it an attractive option for those looking to escape traditional monetary policies. But Bitcoin's value is deeply intertwined with technological trends, regulatory decisions, and macroeconomic factors such as interest rate policies. Its price swings are often dictated by investor sentiment, regulatory developments, and broader economic factors." 

Sinclair affirms that volatility concerns with bitcoin are valid, but he also points out that Bitcoin has survived multiple bear markets and consistently rebounded stronger. "Institutional adoption continues to grow, with major financial firms integrating Bitcoin into their portfolios. The emergence of spot Bitcoin ETFs has further legitimized its status as a mainstream asset."

Now, the introduction of crypto reserves further solidifies Bitcoin's position and credibility. 

Kadan Stadelmann likes the idea of a bitcoin reserve, just not in isolation though. "The United States stockpiles strategic assets like gold, which bolster financial stability. The petroleum reserves safeguard against economic shocks. A Strategic Bitcoin Reserve is the same idea, but in the digital realm. It could act as a financial hedge. Like the gold reserve, it could help support the U.S. Dollar."

And, Stadelmann is against selling gold to accumulate Bitcoin. "It's not a sound strategy. Substituting Bitcoin for gold at the nation-state level is a very risky prospect. Bitcoin is digital gold. Gold is physical gold. Each serves its own purpose. The Bitcoin Reserve should not replace the U.S.' gold stockpile. Instead, it should diversify the U.S.' balance sheet alongside gold."

Julia Khandoshko agrees with Stadelmann's viewpoint. "Investors need to understand that buying Bitcoin is not just acquiring a digital commodity; it's an investment in a system that is influenced by multiple external forces, including institutional adoption, regulatory stances, and market speculation. On the other hand, gold is a timeless and independent asset. Its independence from financial systems makes it an unparalleled hedge against inflation and economic crises. In contrast to gold's stability, Bitcoin's performance is more akin to that of a high-growth technology stock."

Khandoshko leans towards gold. "Unlike fiat currencies or other financial instruments, gold does not rely on external policies, government regulations, or market sentiment. It is simply gold—an asset that does not require investors to track political developments, interest rate decisions, or macroeconomic policies."

But Sinclair is quick to cite Bitcoin's added advantage of transparency. "Every transaction is verifiable on the blockchain, reducing risks associated with gold reserves, which can be manipulated or rehypothecated. Moreover, Bitcoin's scarcity—capped at 21 million coins—mirrors gold's limited supply."

How does Khandoshko view Bitcoin as a reserve asset?

She thinks that Bitcoin's potential as a reserve asset depends on how investors perceive its role in the financial ecosystem. "While some argue that it represents the future of digital wealth storage, others see it as a speculative asset influenced by unpredictable external factors. Gold, on the other hand, continues to be a universal standard of value that requires no external validation."

So, does she consider gold a better reserve asset compared to Bitcoin?

Khandoshko responds in the affirmative, "While Bitcoin may offer impressive growth opportunities, gold remains a steadfast store of value that does not rely on economic policies or market trends. For those seeking a truly independent asset, gold still holds the upper hand in 2025."

To Sinclair, Bitcoin remains the most compelling choice, as nations and corporations look for a digital alternative to traditional reserves.

And Stadelmann believes that "From a geopolitical perspective, the US should look to dominate the sound money space in both the physical and digital realms by maintaining its gold reserves while adding a Bitcoin Reserve."