Determining if Gold or Bitcoin is more important is an ongoing debate; both have their own set of advantages and drawbacks. The value of Bitcoin and gold is never constant as it is subject to change due to various economic, geographical, and political factors. In this article, we have tried to present a comparative analysis to help you determine which is the more important asset for investment.
A Brief History
The history of gold dates back to 4000 BC, when it was used in Eastern Europe for making decorative objects—jewelry, idols etc. It was only during 1500 BC it first became the official medium of exchange in the ancient Egyptian empire, where it was used for international trades.
Bitcoin first made its appearance in 2009. It was released by a mysterious person or a group of people named Satoshi Nakamoto. Unlike gold that is a physical asset, Bitcoin is a virtual currency with no physical form. Both Bitcoin and gold are ideal investments for diversifying one’s portfolio. Bitcoin is a cryptocurrency, but it is highly volatile. As this year started, the price of Bitcoin reached its all-time high & which continues its upward trek till now. Experts predicted that the price of Bitcoin will rise more and may rise to $100,000 in the near future. Now, Several investors and users are investing in Bitcoin as the price goes up every day. However, Bitcoin’s roller-coaster ride continues, but if you are planning to invest in Bitcoin. The Bitcoin Aussie System is an innovative way to invest in Bitcoin, which uses an algorithm that auto trades on behalf of its users. To know more about this, you can check Bitcoin Aussie System Review.
Why Compare Bitcoin with Gold?
Gold is a scarce resource and is an ideal hedge against inflation. Many governments have gold reserves either to invest or to provide a backup for when the country’s fiat currency is in crisis.
Bitcoin is a decentralized currency that is not controlled by a single authority like governments or banks. Despite this crucial difference, Bitcoin is often compared to gold: both are speculative investments and scarce resources.
What Are the Pros and Cons of Gold?
| Pros | Cons |
| Can be used as a hedge against inflation. | Gold is not a reliable source for passive investment. |
| Gold has very high liquidity. | It is not easy to store. |
| Ideal for diversification of investment portfolio as gold inversely correlates with currencies and the stock markets. | While the price of gold rises when the stock markets and currencies crash, the price of gold corrects itself when the panic dies, leading to losses. |
| As a commodity, gold has an inherent value even when there’s a drop in its price. | Gold cannot be used as currency. |
What are the Risks Involved When Investing in Gold?
One can make profits only by selling gold when there’s a rise in its price. That said, gold does not earn dividends. The purity problem is yet another concern where one cannot be very certain. While there are hallmark tests and other certificates, they assess only a fraction of the gold to determine its purity.
Gold is a commodity and is prone to theft. Also, its resale value is quite low as its susceptible to charges, wastage, third-party commissions, etc.
What are the Pros and Cons of Bitcoin?
| Pros | Cons |
| Easy to buy | High volatility |
| Can be used as a currency | It is not regulated as it is decentralized |
| High liquidity | |
| High ROI’s | |
| Highly secure due to blockchain technology |
What are the risks involved in investing in Bitcoin?
Bitcoin’s volatility is one of the major risks when it comes to investing. Unlike gold, Bitcoin is not regulated. While gold is susceptible to robbery, Bitcoins are susceptible to hacking or cyber thefts.
Current Price of Bitcoin and Gold
| Bitcoin | Gold |
| 0.1 BTC = $3809 | 1 gm = $59 |
| 1 BTC = $3,809,483 | 1 kilo = $59,313 |
Investing in Gold or Bitcoin: Which is More Profitable?
Both Bitcoin and gold have their own sets of benefits and disadvantages listed above. Also, they have their own investment risks. Making investment decisions concerning gold and Bitcoins is thus an individual’s personal decision. While gold is ideal for long-term investments, Investors should also consider Bitcoin’s ROI and deflationary nature.
The Verdict
Gold is a commodity while Bitcoin is a digital currency. Nevertheless, both are ideal assets for speculative investments. Bitcoin and gold are considered to be the safe havens of investments especially during the financial crisis and political upheavals. That said, both the assets are quite different in terms of their investment perks. Bitcoin and gold are both subject to investment risks as well, which are stated in the blog. The bottom line is every trader or investor is different, and thus, one must consider the features, advantages, disadvantages, and risks involved before making investment decisions.