Gold vs Bitcoin: What’s The Better Investment Option?

When the economy looks shaky or is in full recession, people often look for a way to protect their assets. They may not be looking to invest and make a profit as much as they are simply trying to protect their money so they don’t lose it.

Inflation can wipe out a portion of your savings and investments and eliminate any gains you’ve made over the years. This is why gold has always been a steady and reliable way to do this. 

That is until the blockchain came around and introduced cryptocurrency. Now, there are some other attractive options that may help you protect your money.

In this article, I will go over some of the differences between gold and bitcoin when it comes to hedging your assets. 

Ease of buying and selling

One of the things that have to be in place to be able to quickly move to protect your money is to be able to buy in quickly. And then to sell fast for when you need liquidity. 

Now, buying gold is not difficult but you do have to either find a site online that allows you to buy gold shares, or to physically buy the actual gold which is quite cumbersome.

It can take you a matter of minutes to buy cryptocurrency even if you previously had no idea how to buy Bitcoins. With gold, there are some extra steps involved. Not that gold is difficult to obtain, but buying bitcoin is much easier.

When you are ready to get your money back into fiat so you can put it towards investments or into your bank account, then this becomes more difficult with gold. You need to find a willing buyer and if the market is not good for gold, then this may take some time. 

Whereas with bitcoin, it is handled in a matter of seconds on an exchange. There is always a willing buyer and you can easily use your bitcoin as a currency which you can’t do with gold.

Scarcity 

What contributes to the value of either gold or bitcoin is the idea of scarcity. This means that there is a finite amount of the commodity available. The biggest difference between the two, however, is that we don’t know exactly how much gold there is still in the world. 

Right now gold is scarce, but if a new vein were to be discovered then this could flood the market with gold and the value would drop overnight. 

This is not the case with bitcoin as we already know how much will be mined. There is a limit of 21 million that can be mined and then there will be no more issued after that. 

Recognition

When you factor in that gold has been used as a store of value for thousands of years, it’s easy to see that recognition heavily favors it. Bitcoin is new and there is still some uncertainty about its lasting power. While it seems here to stay you never know what form it will take in the future, whereas gold is forever.