Why Bitcoin is Known as Digital Gold & How You Can Profit From it

Bitcoin has shaken up the investment world in recent years and is a topic that every investor has an interest in and an opinion on. In recent times, Bitcoin has been referred to as “digital gold” by many, so this post will explore why this is and offer practical insights for UK-based retail investors on how to leverage Bitcoin’s unique characteristics for potential financial gain. 

What Makes Bitcoin “Digital Gold”?

First, it is important to establish why many refer to Bitcoin as digital gold. This is due to the fact that it has a capped supply of 21 million coins, giving it a certain level of scarcity, it is decentralised, and can be used as a hedge against inflation (much like gold). Notably, as of April 2025, approximately 20 million Bitcoins are in circulation, with the remaining supply increasing at a diminishing rate of 0.9% annually. 

Bitcoin Vs. Gold: Performance & Popularity in 2025

Of course, it is helpful to compare the performance and popularity of Bitcoin and gold in 2025. Bitcoin continues to outperform gold, with Bitcoin predicted to hit $150,000 this year while gold is forecasted to reach $5,000 per ounce. As a high-growth alternative to traditional assets, Bitcoin appeals to the younger generation of investors, while gold still appeals to those who are more risk-averse.

Institutional Adoption: Bitcoin’s Move into Mainstream Finance

Bitcoin is also becoming mainstream and is being adopted in many different sectors. Family offices and wealth managers are allocating a portion of their portfolios to cryptocurrencies, with funds now holding an average of 1.8% in crypto assets. Additionally, the regulatory landscape in the UK is evolving, which includes the Markets in Crypto-Assets (MiCA), which aims to provide legal certainty around crypto assets to help build investor confidence in this asset.

How to Profit from Bitcoin: Strategies for UK Investors

Of course, the big question is how to profit from Bitcoin, and this is something that every UK investor will be interested in. While there is the potential for significant financial gains from Bitcoin, it is also highly volatile, so investors need to be prepared for this. Dollar-cost-averaging (DCA) is a popular strategy that reduces risk by spreading investments out over time, and it is also helpful to understand market cycles to determine the best entry point. Given the complexities of crypto trading, readers may benefit from structured learning opportunities, such as a crypto trading course from Investment Mastery.

Risks & Considerations: Navigating Bitcoin’s Volatility

Due to the historical volatility of Bitcoin, investors need to understand the risks and develop a risk management strategy, such as diversifying their portfolio. The UK also has an evolving stance with proposals to integrate crypto into public finance.

Everyone is talking about Bitcoin in 2025, and it is easy to see why it is referred to as “digital gold”. Investors should integrate Bitcoin into their investment strategy but also be aware of the inherent risks of doing so.