For hundreds of years, gold was the number one safe-haven asset, while Bitcoin was launched just over a decade ago. So why do we even discuss which is better, gold or Bitcoin? How much is all the gold in the world worth? Here we have a pretty big difference. Bitcoin has an approximate 442 billion dollar market capitalization at the time of writing, equal to about 2.5 percent of gold’s estimated value, which is over 11 trillion dollars today.
Bitcoin vs Gold Overview
With institutional investors jumping on the Bitcoin bandwagon, cryptocurrency investment has become the norm. According to some experts, It’s no longer a speculative retail bubble. Money managers and corporate treasuries are using Bitcoin as a hedge against currency debasement.
Bitcoin has been nicknamed “digital gold” by many, including billionaire crypto investor Mike Novogratz. This is because Bitcoin shares many similarities with gold, one of which is a finite supply. Gold’s market supply, while not finite, is scarce. Bitcoin has a limited supply of 21 million units. This scarcity may be a contributing factor in its significant rise in value in recent years.
Comparison of Bitcoin and Gold
Gold is a physical asset. Bitcoin, on the other hand, is a digital one. Both Bitcoin and Gold are scarce, but gold does not yet have a ceiling to supply. Gold is a tangible asset that boasts a history of fiat stamping that spans 7000 years from the kings and emperors of old to the bankers of today. This makes it easy to identify what drives demand in the Gold Market. The Market demand for Bitcoin, by contrast, is not as clear and is based purely on price speculation, buy-to-hold strategies, and the underlying blockchain technology itself. Gold also has more institutional ties than Bitcoin, and this affects its volatility as well as how governments regard either of them.
Pros And Cons Of Bitcoin
- Bitcoin is very accessible. You can make a cryptocurrency transaction whenever and wherever you want to.
- If you need quick money, you can sell your bitcoin quickly on any platform
- Bitcoin and cryptocurrency users have complete control over their funds and transactions, keeping everything safe and anonymous
- Bitcoin tends to peak at extremely high prices.
- Bitcoin can be stored securely.
- Bitcoin transactions have a high degree of transparency. A transaction cannot be changed once it is confirmed.
- Protection from debased currencies and the threat of rising inflation
- Bitcoin doesn’t have a centralized authority. This makes it wide open to being exploited by criminals as a means to scam unwary investors.
- Bitcoin still isn’t as common as fiat currencies, and the number of places where you can use it as a medium of exchange for tangible goods or services remains very limited.
- If you lose your private access key, you might lose your digital assets forever.
- Bitcoin prices can drop very quickly and reach very low prices.
- It is impossible to reverse transactions, and your bitcoin cannot be recovered if it is stolen.
Pros And Cons Of Gold
- Gold works very well as a hedge against market crashes and inflation.
- One of the primary attractions of gold as an investment option is the security of knowing that the price is going to rise steadily over time.
- Probably, the most significant benefit of investing in gold is portfolio diversification. The price of gold performs very well in times of uncertainty.
- Investing in gold is incredibly straightforward, even for someone who may have next to no experience with investing their money.
- Storing the gold onsite gives you quick access to it, but it is prone to disasters and theft. If you store it offsite, you might not have easy access.
- Gold has large liquidation spreads.
- You have to pay premium taxes on Gold.
- Unlike cash, stocks, and bonds, gold does not pay any sort of yield. Storing and insuring gold can result in a negative yield.
In conclusion, it can be argued that while Bitcoin has been used as a medium of exchange, neither Bitcoin nor gold meet all the functions necessary to be considered ‘money’ and therefore, neither fully satisfies a utility as a currency. Ultimately, it depends on your goals. Bitcoin is a better investment for potential short-term gain, but you also have the potential to lose a lot of money. Gold, however, is a stable investment that is almost guaranteed to return on your investment in the long term. However, You can make an investment through a Bitcoin Loophole bot to make good profit from it. You can check Bitcoin Loophole reviews by users and experts to know more about this unique platform.