Victor Ugochukwu · Dec 14, 2020 . 5min read
Bitcoin v/s Gold – where should you invest?
2020 has seen the global economy in meltdown which has prompted investors to look to gold and Bitcoin as alternate investment.
By Shilika · Jul 21, 2020 . 6min read
At a time when the global economy’s future is uncertain, investors are looking to alternate assets to store their wealth. The two most popular assets are gold and Bitcoin. In this article, we will analyse the strengths and weaknesses of both.
Similarities between gold and bitcoin
Bitcoin and gold share many similarities. Primarily among them is the fact that they both are limited in supply. We know for a fact that Bitcoins cannot exceed 21 million. We are unsure about the exact amount of gold, but we do know it is not unlimited. Due to this, both assets are also viewed as safe-haven assets. Their limited quantities ensure that their value remains relatively stable over time. Finally, both assets are speculative in nature. Their values change according to market sentiments under specific circumstances.
Differences between gold and bitcoin
The key difference is that gold is physical and Bitcoin is electronic. Gold is a tangible asset that can be used to create other products like Jewellery. Bitcoin is a digital currency that is mainly seen as an investment and mode of transaction. Another difference is that gold has been around for centuries as a financial asset while Bitcoin has only been around for a decade.
Which is the better investment?
The value of Bitcoin over the last decade has been extremely volatile. It reached its peak during December of 2017,since then it has seen highs and lows. In 2020, it has remained reasonably stable. Gold, on the other hand, has been very stable over the same period. It experienced a major crash in 2013 but since then it has steadily climbed. Moreover this year it has reached record high values.
Gold’s big crash in 2013 saw its value fall by around $15,000 from a high of nearly $54,000. Since then gold has slowly and steadily returned to its previous high.
Where you decide to invest your money depends on your goals. If you are looking for big rewards, you are more likely to get that from Bitcoin due to its higher volatility. If you are looking for a safe and stable investment, then gold is your best option. Ideally, however, your portfolio should consist of a well-balanced combination of the two.
As everyone knows, Bitcoins price went up to nearly $20,000 at one point. Since then it has gone as low as $3000 and is currently trading at just under $10,000. The risk is huge but the pay off can be just as enormous.
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Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone and do not necessarily reflect the views, opinions, positions or strategies of Cryptodose. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.