Why Bitcoin is Scarcer Than Gold: Cathie Wood's 2026 Analysis

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The Mathematical Scarcity Advantage of Bitcoin

Bitcoin’s mathematically limited supply makes it a superior scarce asset compared to gold, especially in an era of increasing institutional demand. This is the view expressed by Ark Invest founder and CEO Cathie Wood in her “2026 Outlook” report.

Gold vs. Bitcoin

While gold appreciated by 65% in 2025, Bitcoin declined by 6%. Wood attributes the 166% increase in gold since October 2022 to “global wealth creation,” rather than inflation fears — a demand that exceeds gold’s average annual growth of about 1.8%.

Bitcoin exhibits fundamentally different supply dynamics. “Gold miners can increase production in ways Bitcoin cannot,” Wood points out. “Bitcoin is programmed mathematically to increase by about 0.82% annually over the next two years, after which growth will slow to about 0.41% per year.”

The Impact of Inelastic Supply

This inelastic supply programming means that any sudden increase in demand — such as ongoing inflows into spot ETFs — will have a more powerful impact on Bitcoin’s price. “If demand for Bitcoin continues to grow, this reference cryptocurrency could benefit more than gold due to its mathematical properties,” the report states.

Bitwise Chief Investment Officer Matthew Hougan recently confirmed this scarcity argument, suggesting that sustained institutional demand exceeding supply could trigger a “parabolic explosion” in Bitcoin.

Market Context and Structural Argument

“Bitcoin’s performance in 2025 looks weak on its own, but context is important,” says Georgii Verbitskii, founder of TYMIO. “In 2024, Bitcoin surged significantly… the subsequent consolidation period is not only normal but also reasonable.”

Verbitskii agrees with Wood’s core structural argument, noting that “when capital migrates into tangible assets during global currency re-evaluation, Bitcoin and gold belong to the same category.”

However, he emphasizes a key difference: Gold miners can increase production when prices rise, but Bitcoin’s supply is fixed. “This asymmetry means that when demand returns, Bitcoin’s price reacts in a more explosive manner structurally,” Verbitskii states.

Historical Outlook and Diversification Benefits

Wood’s analysis also places the current gold rally in a concerning historical context. The ratio of gold market value to broad money supply M2 has reached levels last seen in the early 1930s and early 1980s — she describes this as an “extreme” period. Historically, sustained declines from these high levels have been associated with strong stock market returns.

For resource allocators, Wood emphasizes the final key advantage: diversification.

The correlation between Bitcoin and gold is less than that between the S&P 500 and bonds. She concludes that Bitcoin “should be a good diversification source for asset allocators seeking higher returns per unit of risk over the next few years.”

“Looking ahead to 2026, I don’t see this as a buy or sell issue, but rather a hold issue,” Verbitskii says. “Gold provides stability, Bitcoin offers asymmetric upside potential. Historically, Bitcoin’s growth rate has been faster than gold, and I hope this pattern continues.”