Bitcoin vs. Gold: Which One Should You Buy?

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The great debate of our modern time: Bitcoin vs. physical gold. They’re both vastly different forms of currency and investments, which is what makes it such a difficult topic to delve into.

Gold is what we’re told to buy in the event of economic collapse, but Bitcoin is the decentralized currency that defines cryptocurrency—which one is a better investment for you?

And which one will be more useful when and if we face catastrophic financial failure in the near future? Let’s talk about that.

Let’s discuss the volatility of owning one over the other, what your investment goals are, and how to make the right decision for yourself.

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Gold vs. Bitcoin: Which One Should You Pick?

Everyone has their own investment styles, which is what makes investing in either such a great option. Historically, we can see that gold fluctuates. However, we’ve all lived through the Bitcoin boom, and we’re watching the way it trends now.

Which one ends up being the better option? There’s no telling what will happen if Bitcoin plummets, but we know that gold is future-proof—everyone wants gold, because it’s physical wealth they can touch and hold.

Because Bitcoin and cryptocurrency relies on access to technology and the internet, it’s only worth something if it’s accessible in the event of an economic collapse. That’s why gold is favored here.

If you’re investing to grow your wealth and slowly scrape gains off the surface, Bitcoin would be your best bet. It is truly decentralized, and its standard doesn’t change (much like the gold standard).

For protection against inflation, Bitcoin is superior to gold in its current state. While the historical data is obviously much shorter, nothing has truly presented itself as a decentralized currency like this before.

Bitcoin is a solid investment no matter where you go in the world, where the prices of gold can normally skew

Bitcoin is Secure; Gold is Tangible

As it’s decentralized, no one government or body can tank the price of Bitcoin. If anything, a government making Bitcoin illegal in their country will only drive the price higher, as people yearn for financial security.

With gold, you have to have a buyer, but just about everywhere will take cryptocurrency due to its rise in popularity.

A currency that you can use anywhere (and in varying, fractal amounts compared to bullion) is invaluable. There’s no transfer, either; you don’t actually have to sell Bitcoin like you would with gold.

At the end of the day, you can hold gold in your hands. Bitcoin will never be a tangible asset. Gold is also a finite resource, whereas cryptocurrencies are made nearly every day.

Bitcoin is unique, but it uses blockchain technology just like other cryptocurrency, and is subject to massive drops as more coins are released (depending on if that ever happens).

One fear with gold is that it will become common if asteroid mining is ever a common practice, but as of right now (and the foreseeable future), we don’t have to worry about space mining creating an abundance of gold and tanking the price. We can’t be 100% certain about something like Bitcoin since we can’t touch it.

There are benefits and setbacks to both investment types, and it’s not clear which one will be right for you. Many investors are diversifying their portfolio to include a small share of gold, and a predominant share of Bitcoin or other cryptocurrencies.

This allows you to be future-proof, technology-proof, and still place a majority stake in the cryptocurrency marketplace where you stand to gain more money in both the short-term and long-term.

Market Cap on Gold vs. Bitcoin

We can suddenly find more gold, and flood the market to lower the price. As the population expands and gold is sold/becomes more scarce, the price continues to rise again.

However, Bitcoin is digital, so it’s something that can be expanded upon later depending on how the blockchain changes (even though it’s unlikely). The point is, it’s finite right now, but since it’s digital it can absolutely change in the future.

The main thing to keep in mind here is that the market cap on gold is far ahead of Bitcoin, and while Bitcoin prices continue to climb, they would have to be over $600K per Bitcoin to match or beat the gold market cap.

Which is More Volatile?

Bitcoin has a shorter history, so it can be difficult to say that one is more volatile than the other. Gold has its peaks and valleys over the last one-hundred years, but it always finds a way to bounce back no matter what.

We don’t have the same security with Bitcoin that we have with gold. It’s not time-tested, not quite yet.  Gold is a structured financial decision. For many, it’s boring, whereas Bitcoin offers the potential for making a fortune overnight.

That adds to the volatility, because trends and media will affect how Bitcoin soars and how fast it drops (when the bubble pops). Yet despite all the cryptocurrency bubbles we’ve seen over the years, Bitcoin remains on top.

Overall, you have to look at what you’re able to take as a temporary loss. If your Bitcoin value fell by 45% tomorrow, would it ruin your entire investment portfolio?

Or could you hold out since markets predict that it’s only going to regain and continue to rise? It comes down to the investor, because both investments possess long-term return and stand as investment hedges.

Bottom Line

While gold is a sound investment, cryptocurrency (particularly Bitcoin) cannot be ignored as being a viable, long-lasting option. Both appeal to different investment portfolios and investor types.

You can accrue wealth with both options, but with the way that cryptocurrency as a whole continues to grow, you have a higher chance of earning money from short-term investments as well as long-term investments from Bitcoin than gold.

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