One Ounce of Silver vs. 1,000 USDT in 2016: A Store-of-Value Reality Check

Silver was close to hitting a multi-year low in early 2016. Bitcoin hovered around $430. In early 2016, both a silver trader and a cryptocurrency investor had the exact amount of funds – $1,000. The outcome for both of them after 10 years cannot be any different.

In January 2016, the price of silver oscillated between $13.80-$14.20 per troy ounce, thus marking the beginning of another post-2011 period (BullionByPost historical pricing). At the same time, the price of Bitcoin in the beginning of the year was at $434.33, spending the rest of the month fluctuating within the $370-$450 zone (verified historical close).

So, in January 2016, one could have either bought some 70 troy ounces of silver or 2.3 Bitcoin.

As far as silver is concerned, it would be fair to say that the investment has been a good choice, too. From roughly $14 to $30 per troy ounce over 10 years is a significant profit (especially considering the extremely low interest rate of a typical savings account in 2016).

However, the comparison to Bitcoin seems unfair because the latter asset was designed to grow fast and aggressively. Silver did everything one could have expected from a regular investment: it held the position well, followed the level of inflation, and went up slowly. Bitcoin, on the other hand, managed to make an initial $1,000 grow to $150,000.

What can be called the silent loser of this comparison is the 1,000 USDT. Stablecoins keep the nominal value, thus ensuring the safety of the investment. However, they lose real purchasing power each year due to inflation.

Which store-of-value thesis do you actually believe in long-term — silver, BTC, both, or neither?