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With a sleepy start to 2022, bitcoin has been outpaced by the classic commodity — but this could change fast.

Since the advent of Bitcoin, physical gold and digital gold have been presented as foils to investors. But perspectives of each asset’s underlying mining industry are too often lacking from the comparison conversations.

In particular, the past 12 months of market activity have highlighted some important idiosyncrasies and similarities between the yellow metal and its blockchain-based counterpart. While bitcoin mining companies significantly outperformed gold miners several months ago, the market trend has shifted to favor gold. But will this dynamic last?

Overviewing some of the latest market data for bitcoin and gold miners is the goal for this article. Along the way, the data will point to important similarities and differences between the two industries showing that, in some ways and despite relentless banter on Twitter, miners of gold and bitcoin have more in common than is typically assumed.

All the charts in this section visualize different data sets for the public bitcoin and gold mining industries. The charts may be unnecessary though, given that die-hard gold advocate Peter Schiff has been awfully vocal about his favorite yellow metal recently.

The normalized year-to-date performance of some top gold companies compared to a few top bitcoin mining companies are almost mirror images of each other. The line chart below shows these two groups – gold and bitcoin companies – and their trends in 2022. Gains for public gold mining companies are in the double-digit percentages while price movements for bitcoin miners are roughly the same but in the opposite direction.

Comparing these companies based on how far below their all-time price highs also demonstrates the recent relative strength of physical gold compared to digital gold. The bar chart below shows this data. Readers will notice Barrick Gold is still well below its high set several years ago despite the recent overall strength of the gold market. Bitcoin mining companies, by comparison, are sitting between 60-80% lower than their highs.

All this data tracks closely with the returns for gold and bitcoin themselves, as one would expect.

For Bitcoin, the start to 2022 has not been particularly lively. The leading cryptocurrency has mostly traded in a range between $36,000 and $46,000, occasionally deviating from this area for brief periods. Not surprisingly, this price action has caused bitcoin’s market volatility to steadily decline.

Meanwhile, gold has enjoyed a relatively strong start to the year, steadily trading higher since January. The chart below shows year-to-date returns for bitcoin and the yellow metal.

Measured in percentage drops from all-time highs, gold wins again. (Go ahead and laugh, Schiff.) At the time of writing, gold is roughly 6% off its record high while digital gold is trading over 40% lower than its high point, reached in late 2021.

Bitcoin being outperformed by a yellow metal isn’t the norm for the relationship between these two markets, however. Throughout 2021, for example, bitcoin and its mining companies enjoyed a strong and prolonged uptrend in price while gold and gold miners lagged significantly. Some charts shown later in this article demonstrate this period.

But for now, as bitcoin sits in a relatively small price range and volatility drops, gold is taking center stage. So, will it last?

Of course, this is an open question for which predictive answers are hard to give. Compared to gold mining companies, bitcoin miners are a far newer and less established or efficient industry, which can have strong effects on their price performance. With time, it’s reasonable to expect these nascent characteristics to be outgrown. Also, hedge funds that are active in the gold market are reportedly increasing their bearish bets on the metal, which could signal gold’s near-term future.

Putting aside the market data and price comparisons for now, these two mining industries have more in common than is usually acknowledged. Mention gold and bitcoin together in the same tweet, and a sort of innovation-versus-antiquity animosity is almost instinctively applied as an undertone to whatever is written. But both assets represent asset classes beloved by different schools of political libertarians and economic freethinkers, even if generational divides often overshadow the two investor groups.

Gold and bitcoin miners both continue experiencing the full weight of environmental ire from non-profit organizations, journalists, and politicians whose platforms and personal brands require lambasting purportedly heinous crimes against the climate. Even though some bitcoin investors (including this author) like to occasionally poke fun at pictures of gold mining sites compared to bitcoin mining farms on social media, reality is that both types of miners are and likely always will be heavily disfavored by environmental groups.

One other noteworthy similarity is how both of these groups of companies trade compared to their underlying asset. Gold and bitcoin mining companies trade in public markets as effectively leveraged bets on whatever commodity the company mines. When either bitcoin or gold moves in a direction, publicly-traded mining companies for either asset follow suit but with more exaggerated moves up and down.

The chart below visualizes 12 months of normalized price action for bitcoin and a few mining companies included in charts shown earlier in this article. It’s easy to notice when bitcoin moves up or down how mining stock prices follow with larger percentage moves.

This relationship is even more pronounced in the same chart constructure for gold and gold miners. Over the same period (past 12 months), periods where gold traded lower were followed by even larger downward moves by gold companies. The opposite is true for gold’s latest few months of bullish price action.

Bitcoin and bitcoin mining companies underperforming gold as they have to start 2022 is anomalous but not unexplainable. Gold bugs can have their laughs for now, but the honey badger is only sleeping. And even though social media banter typically pits these two assets and their investors against each other, gold and bitcoin miners have more in common than is typically recognized. Both types of miners are, in some ways, more so brothers-in-arms than enemy combatants. Especially on environmental issues, even if digital gold replaces a significant portion of the yellow metal’s market, both forms of mining share a common bond in being brutalized by woke environmentalists. In any case, for now gold can enjoy its moment to outshine bitcoin because eventually digital gold will be back in the driver’s seat.

This is a guest post by Zack Voell. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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