CME Group’s chief economist and managing director, Bluford Putnam, recently acknowledged that Bitcoin is competing with gold as a hedge against inflation.

“Gold appears to have an emerging competitor in Bitcoin,” told Bloomberg for a video released on YouTube on Tuesday. “Given the current price range for gold, it is likely that increased production will be a feature of 2021,” he said.

Gold’s supply is less clearly defined than Bitcoin’s. Built into the asset’s code, BTC touts a set maximum limit of 21 million coins, dispersed into circulation on a steady mining schedule. Putnam mentioned this characteristic of Bitcoin in his rationale, although he also noted the coin’s volatile nature. “Please be aware, fixed supply does not mean less volatility,” he explained. “Indeed it can mean the opposite,” he said, adding:

“When the supply is relatively inelastic, then the dynamics of shifting patterns with demand can have very large and abrupt impacts on prices. Bitcoin has illustrated this point.”

A store of value or hedge often represents a place to put value on a longer-term basis as possible protection against inflation and shifting global economic factors. Lack of correlation can be a key aspect of safe-haven assets, as noted by Investopedia.

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“We’ve also noticed that gold may be losing its appeal as a hedge against global political risks,” Putnam said. “In the 2017 to 2020 period, the mostly ups and occasional downs of the gold price appear to be directly tied to Fed policy shifts more than anything else,” he added. “Since equities were responding to the same driving force, the gold-equity relationship tended to become a little more closely associated, weakening gold’s safe-haven appeal.”

Gold and Bitcoin both broke their previous all-time price highs in 2020. Gold bested its record high in July, going on to surpass $2,000 per ounce in August, according to data from TradingView.com. Bitcoin broke its record high in December, and doubled from there in the weeks following.

Proponents often argue that Bitcoin is like digital gold, but with properties that make it easier to store and transport. Industry leaders have also been known to pit the two store of value assets against each other.