Bitcoin Vs. Gold Investment
Bitcoin Vs. Gold Investment
Bitcoin is one of the greatest advancements in technology and a very good investment, but only for short-term gain. As for gold, it has always dominated the haven of stable investments that is almost guaranteed to return your investment in the long term.
Investors are always looking for ways to shift their investments into more stable and safe methods, especially in times of market trouble. Bitcoin, a new digital and virtual crypto currency, emerged onto the scene and achieved widespread recognition in this new era. It is competing with gold, the safest traditional move, to become a safe option for investments.
Below, we will compare the unique features of gold vs. cryptocurrency to determine which is the safest asset on the long-term:
The Pros & Cons of Gold Investment
Pros
- Protection from Inflation
Gold has always been identified as a very valuable asset and a popular form of investment for its rich history. It acts as an excellent hedge against inflation, because its price tends to rise when the cost of living increases. It is a reliable measure of protection against purchasing power risk of dollars. Historically, gold has always been known for its great performance during inflation and its importance in the old and modern economy is that it can hold its value for a long period of time.
To put things into perspective, consider the following example: Let’s say you have a choice of either holding an ounce of gold or simply keeping 1900$. However, if you had an ounce of gold today and converted it for today’s price, it would still be enough to buy the same old things, but the same cannot be said for the 1900$. The value of gold increased with time, while the value of the dollar decreased due to inflation.
- Liquidity
One of the main investment benefits of gold is its liquidity, because it is the most precious metal with the greatest degree of trading activity. Refiners, banks, and dealers use gold for investment purposes, jewelry, or industrial uses. So it is always on demand. Therefore, it is a very liquid asset and can also be sold for cash on the spot.
- No Need for Large Capitals
Gold is a valuable asset and investing in it will require considerable capital. If the aim is to have a greater return, there should be a commitment of a specific amount of money aside for investment.
Cons
- Unavailability of Immediate Cash Flow
Gold doesn’t give a regular income and is not a passive investment option, since it generates money only once it is sold in the open market.
- Possibility of Fraud
Gold scams are so common. Fraudsters tend to make false or misleading claims regarding the quality of gold or make claims about the state of economy to convince investors to buy everything based on the prediction of a new economic collapse. Hence, you may end up spending your savings on false gold.
The Pros and Cons of Bitcoin Investment
Pros
- International Payments Require no Transaction Fees
Bitcoin transactions have no government involvement, transaction fees are kept very low, unlike standard transfers and foregn purchases that require exchange costs and fees. Additionally,any transfer in bitcoins happens very quickly with no wait periods.
- User Autonomy
Digital currencies allow users to have control over their own money and the amount to spend without dealing with an intermediary authority like a bank.
- Variety of Payment Methods
Paying for your coins has never been easier! Bitcoin users need to just have internet access.Purchasers never have to travel to a bank to buy a product. Unlike other online payments, personal information is not necessary to complete any transaction.
Cons
- Wallets Can Be Lost
If a virus corrupts data or a hard drive crashes and the wallet file is corrupted, Bitcoins have essentially been lost. There is no way of recovering it, which makes it easy to bankrupt a wealthy Bitcoin investor within seconds.
- Not Widely Accepted
A very small group of online merchants only accept bitcoins. This makes it infeasible to completely rely on bitcoins as a currency.
- No Valuation Guarantee
The decentralized nature of bitcoins makes it hard to guarantee its minimum valuation. If any large group of merchants decide to leave the system of Bitcoins, its valuation will decrease greatly which will hurt users who have a large amount of wealth invested in Bitcoins.
Conclusion
Gold is still known to be the safest asset for investment throughout history and has always protected its gold market cap to be stable. Investors can still protect their wealth even in times of political and economic uncertainty and will not need to worry about gold vs. bitcoin price issues. Lebanor, full-service gold and silver refineries with professional expertise, is the trusted marketplace for gold investment. Its brokers help educate investors, so they don’t fall victim to gold fraud.
