People buy both Bitcoin and gold as an investment. While Bitcoin is known for volatility, gold is considered safe for investing. Also, both are commonly used to build one’s portfolio. However, the only difference is people are buying gold as an investment from traditional times. Also, it has shown significant returns for a long time.
But until recently, bitcoin has also entered the picture bringing fantastic gain to the investors. As a result, millions of people who never thought of seeing digital currencies as their alternative assets are now drawn to the bitcoin bull run.
Let’s talk about the gold value
There is no doubt that gold prices have fluctuated a lot in the past, just like the stock market, but it has kept its value steady over a long time. Thus, keeping in mind the volatility of the market we live in, investing in an asset like gold is sensible.
For millennia, gold has been and continues to be recognized as an extraordinary store of wealth. One of the advantages of gold is the culture that surrounds it. It’s a well-known asset that’s available to traders from all walks of life and in various economic conditions. As a result, even if individual investors are unfamiliar with cryptocurrency, they may purchase gold.
Individuals aren’t the only ones that believe in the value of gold. Central banks also use their value to promote economic stability and development. Due to the volatility of currencies, the US implemented the gold standard until the 1970s, and investors opined it to be a safe option. According to Carrasco, several cryptocurrencies have been prohibited, and Bitcoin may be next.
Gold has an environmental influence as well. Water contamination, toxic emissions, and biodiversity loss are among the potential dangers associated with mining activities. It has also been connected to human rights violations and sponsoring armed conflicts.
Bitcoin Being Called Digital Gold
As per the measurement of the market capitalization, bitcoin is considered the most valuable cryptocurrency of all. Dissimilar to the stock market, which is open only from 9 to 4 every week for trading, cryptocurrency trading is open 24 X 7. The traders can transact or exchange bitcoin and other digital assets at any time of the day.
Another advantage to bitcoin as a hedging asset is that they are available in fixed quantities, i.e., 21 million bitcoins. So, this means the chances of their value increasing in the future is high.
Bitcoin is a type of gold because it is not issued by a federal government or a central banking system. Instead, bitcoin is a decentralized currency produced by the combined effort of miners that control the blockchain through a computer network. The group, through their network, verifies the transaction individually and is rewarded with bitcoin in return for their effort, time and computing power.
Now investors are seeing the worth of the bitcoin industry. More and more people are investing in it thanks to apps like official trading system that make the process even easier.
Gold Or Bitcoin- Which Should one Choose
Gold has always dominated the safe-asset arena for a long time, while bitcoin has achieved recognition in the last few years. So, to make a wise choice, here are some parameters to compare:
- Transparency and safety
In gold, there is a chance of tainting the metal. Also, they are prone to theft. But Bitcoin is free of risk as it is an encrypted and decentralized currency containing complex algorithms so hard to manipulate. Thus, making it a transparent and safe investment for the future.
- Rarity
Both bitcoin and gold are scarce in resources. Only 21 million bitcoins are in circulation, so there are chances of more rise in the Bitcoin price in the future. As for gold, there is a conjecture that it will be extracted from asteroids in the future.
- Baseline Value
Gold has been used for many things from old times, like jewelry, dentistry, electronics, etc. Their demand is predicted to rise further in the future. In contrast, bitcoin has raised its awareness of bitcoin technology and is being used for purposes other than investing.
Summing Up
To conclude, gold is an investment for those who have a conservative mindset. On the other hand, new-age investors who like to take risks to earn more should go for crypto investment. Eventually, you are the decision-maker where you want to invest your money, gold or bitcoin.
Featured Image by Steve Bidmead en Pixabay
