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Should you Buy Gold or Bitcoin?

30 January 2020 17:35, UTC
Should you Buy Gold or Bitcoin?

The world economics has had its fair share of ups and downs. But, many predict that the recession is coming. With this, a lot of investors are slowly going for a more stable option. According to Lear Capital for many years, Gold has proven to be a safe haven for investors in times of market trouble. However, a new option appeared in 2009 in the form of Bitcoin. It's a cryptocurrency that started the era of digital currencies. The question now, should you Buy Gold or Bitcoin? To answer, we have to consider various factors.

Transparency and Safety

When we talk of transparency and safety, Gold has an established advantage. This is mainly because Bitcoin has been launched just over a decade. Gold already has an established system when it comes to trading and tracking. This system has been practiced for several decades already.

With Bitcoin, even though it has a decentralized system and applied with complicated encryption algorithms, the safety of sites where it can be traded is still questionable. There have been several cases where a large amount of Bitcoin transfer experienced some issues where millions worth of Bitcoins went missing. Resolving the issue has been found to be difficult since Bitcoin remains hard to track.

Baseline Value

Gold has long been a valuable material for consumers from electronics, jewelry, dentistry and a lot more. For this, it's value has already been established. For Bitcoin, since its release, it has attracted billion of people who found it still hard to access traditional banking like credit cards. With the use of this cryptocurrency, people could now send value all over the world without having to worry about high banking fees. Even though this is yet to be fully developed a lot of people are already looking forward to it driving more Bitcoin investors.

Liquidity

When it comes to Liquidity, Bitcoin has a long way to go. You can get cash anywhere with gold but for Bitcoin the market is limited. Though many are expecting Bitcoin to be as liquid, it still has a limit when it comes to daily exchanges and withdrawal.

Volatility

Maybe among the biggest factor to consider when choosing between Gold and Bitcoin is volatility. As per history, this is where Bitcoin lacks the strength since if you could remember, at the beginning of 2018, its value rose to as high as around $20,000 per coin. Then, it slowly dropped down to around $4,000 after a year. Its current value is around half of its highest value before. Additionally, the value of Bitcoin is easily affected by news in the digital currency world. Unlike Gold which is a safer asset since it is not connected to the usual economic factors that could change its value quickly.

Based on the factors mentioned above, Gold is still a safer bet. Its established and proven value is something you could not ignore. Though Bitcoin is potentially larger in profit, its volatile market is something to consider. At the end of the day, everything still depends on you, the investor. If you want to expand your portfolio, then investing in Bitcoin is not a bad idea as long as you are fully aware of the environment you are about to embrace.



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