Okay, so, before you decide to jump into any kind of short or long-term investment you want to make sure you’re doing the right thing, right? You want to make sure that you’ve chosen something to invest in that’s going to do well and give you a good return on investment—it’s your hard-earned money after all.
That’s why you’re probably considering Bitcoin vs. gold vs. dollar, yes? You want to know other investors are going for and know which is going to give you the best ‘bang for your buck’ when it comes to your overall investment of any form. Digital currencies? Gold and silver? Investing money in the Central Bank? Read on.
Benefits and Drawbacks of the U.S. Dollar
Let’s take a look at the U.S. dollar first and see why it’s a good or bad option for you. We’ll take a look at the positives of it first because there are actually several of them.
These dollars are easy to store, easy to claim and even easy to transfer. It can inflate and deflate based on the economy and it helps to improve the economy as needed. These dollars are also easy to use and even divide, plus they keep banks from collapsing over time.
When we look at the negatives, however, we see that cash is controlled in its creation by a small group of individuals. Not only that but cash doesn’t stay stable and the supply doesn’t either.
There is a lot of fluctuation to the market as well, and those who control the cash itself can cause increases or decreases in the actual supply that’s available, which is an extremely big problem for those who might not have cheap credit or liquid capital.
Finally, when there is hyperinflation or economic collapse, it can cause problems for the currency, as it’s really only backed by the government’s word that it has value.
Benefits and Drawbacks of Gold
Next, let’s take a look at gold as a good or bad option.
First, precious metals like gold are considered rare and it’s considered useful, plus it’s not something that can simply be created. It’s pure, which allows its value to be found easily and it can be verified as well.
Not only that but gold prices can’t be manipulated by the values or opinions of anyone, such as the small group of individuals that control the U.S. dollar. It’s also extremely stable and doesn’t fluctuate in the same way that a dollar will.
On the other side, if you have a gold-backed currency or other precious metals you could have difficulty proving that there is enough gold available for the purpose.
If the gold backs a currency it also can’t be used for anything else because it’s being held for that purpose alone. Storing the gold and even more, protecting it from theft, is an extremely expensive and time-consuming undertaking.
Also, it’s difficult to divide out properly so that every person could have an accurate valuation. A transaction processing system that will control a gold-backed currency is also extremely expensive.
Benefits and Drawbacks of Bitcoin
Finally, let’s take a look at the newest method of investing, which is Bitcoin. This system which throws up words like cryptocurrencies and blockchain technology actually has a level of usefulness that actually overruns both other options.
That’s because it has only one use and by using it that way nothing else is being taken away. It can’t be manipulated in supply by anyone and the transactions that are completed with it actually occur instantly, instead of other transactions that take far longer to complete.
Transactions are also irreversible because there can’t be any kind of charge-backs to drive up costs and the system itself is completely transparent so you know exactly what’s happening. Plus, you can trust it to be efficient and infinitely divisible.
All right, but we have to look at what the negative aspects are for the cryptocurrency market, right? So the main negative is that this digital currency can be extremely complicated for those who are just getting started.
On top of that, the wallets that are used to store the money seem to fall into one of two camps: inefficient for security or difficult to use. There have also been scandals through the system and the conversion rate to dollars has been quite erratic, making it difficult for some to trust it as an investment strategy.
What This Means for You
Overall, what this all means for you is that there are benefits and drawbacks to all three methods of investment. There’s no one way to start investing without any risk or any drawbacks.
You’re going to have to take a look at what’s out there and which one is going to do the most for you. Once you’ve done that you’ll be able to better understand how to get started and who you should get in touch with to find out more as well.
After all, with several different options for investment, you could end up needing a different custodian.
The best thing that you can do is make sure that you are looking at each of these benefits and drawbacks for yourself. Consider which ones are the most important to you.
It’s entirely possible that Bitcoin digital currency and cryptocurrency exchanges may not be the best long-term investment option for you or that gold may not be the best option. Each person is unique and that means your investment needs are different as well. Make sure you choose something that you can feel comfortable investing in.
Also, choose something that you will be able to get what you need out of. Even though these investment processes are generally similar in every aspect, you never know what you’re going to get into.
If you like the idea of playing the market a little more something like cash may be a great option because there’s room for a lot of gains but also a lot of loss.
If gold and silver or Bitcoin has reached an all-time high, they could just as easily hit an all-time low. However, gold and Bitcoin cryptocurrencies help to reduce some of the fluctuations.
On the other hand, if you’re looking to play it safer you may want to avoid anything the cryptocurrency market as it might have that high level of fluctuation or uncertainty around it. Only you can really make that kind of decision.