It's time for gold to step aside. The data speaks for itself.

It's been 15 years since Bitcoin (BTC -0.07%) first launched. Since then, it has gone on a historic run to become the most productive asset of the 21st century.

Over the course of this journey, investors have had a hard time categorizing what Bitcoin is and why it has merit as an investment. Perhaps the most well-understood and effective narrative to take hold is that Bitcoin is akin to digital gold.

While comparisons to gold help us categorize Bitcoin's multi-faceted use cases, is it actually a better asset than the age-old precious metal? With a little digging, it's clear that one asset outshines the other.

Tracing gold's roots

Gold's utility over the centuries has changed considerably. Primarily used as a currency for millennia, it eventually took on the role of a safe haven asset during the tumultuous economy of the 1970s. Amid double-digit percentage inflation, gold rose to prominence as the most viable means for individuals to preserve wealth and combat an eroding dollar.

To gold's credit, it did a pretty darn good job. During the 1970s, gold rose from just under $300 an ounce to nearly $2,600, a monumental 700% increase and more than enough to outpace raging inflation.

It's from this decade's performance that the narrative of gold as a store of value likely has its roots. Yet the reason this narrative has persisted remains less clear.

When accounting for decades of inflation since the 1970s came to a close, gold's performance has been relatively lackluster. From 1980 to the end of 2023, gold's total inflation adjusted return is an underwhelming -4%. So much for being an inflation hedge.

Making the Bitcoin comparison

There are likely several factors contributing to gold's demise, such as a generally stronger dollar compared to the 1970s as well as more moderate interest rates that have pushed investors to own dividend-producing assets. While pinpointing the exact culprit remains challenging and a task better suited for macroeconomic experts, what is clear is that the predominant narrative of gold as a store of value is fading.

Admittedly, since we don't have decades worth of data for Bitcoin, it might be a little unfair to measure gold's performance over 50 years. So, let's look more recently.

During the past decade, gold has an inflation adjusted return of 30%. On an annual basis that's a measly 2%. Then there's Bitcoin. When accounting for inflation, the world's first cryptocurrency is up more than 3,700% with annual returns of 44%.