If BTC was really a rival to gold, it would be at $278K

If bitcoin (BTC) had rallied as much as gold over the past 12 months, it would currently be trading at $184,000. Over the past 12 months, BTC has declined 12.3% while gold has rallied 80%.

However disappointing that math might be for investors, the real numbers are even worse.

Rather than swapping the percentage directly, a proper analysis intended to track the competitive success of BTC at displacing gold should adjust the percentage according to market cap.

Consider the outcome of this more relevant calculation.

Bitcoin vs. gold, recalculated

Today, BTC is worth $1.8 trillion, and the most popular estimate of gold’s market cap is $34.4 trillion. A year ago, their market capitalizations were $2 trillion and $18.5 trillion, respectively.

Therefore, assuming a starting point of gold at 8.25x larger than BTC, and a conservative timeframe of one decade for BTC to attempt to reach parity with gold, BTC needed to not only keep pace with gold’s 80% rally but also gain ground on at least one-tenth of its -89.2% starting point beneath gold.

Read more: Crypto gold promoters claim 80% APR amid speculative mania

In other words, if BTC had kept pace with gold’s rally and even gained 1/10th ground on its size shortcoming, BTC should have rallied 172%.

Specifically, that calculation would put BTC today at $278,000.

Unfortunately, BTC fell on its own accord, and actually lost ground on displacing gold as any type of savings asset.

Bitcoin at $89,000 is 68% lower than it should be if it were to have kept a competitive pace with gold over the past 12 months.

Note: Calculations based on US$89,000 per BTC and US$4,950 per troy ounce of gold.