Bitcoin has been popularly compared to another popular asset commodity, gold. Over time, BTC has been termed as the ‘Digital Gold’, due to the exceptional performance of this crypto in the market. However, is it true that BTC is an equivalent of gold, or is as good of an investment as gold?
The answer to this question lies in your goals and objectives. In the case of Bitcoin, it can prove to be much more of a short-term investment than a long-term investment.
On the contrary, there is also a very high risk of losing your investment and money in the short run due to the underlying volatility in BTC. On the other hand, gold is a much more stable and steadier investment, which ensures positive returns for investors in the long run.
In this article, we will be attempting to draw a comparison between gold and bitcoin, based on the analysis of their respective advantages and disadvantages.
Know that this analysis is based on our take on the matter, and while some parts of it might be facts and figures, other areas can be opinions and subjective. Here’s our take on the comparison of two of the best investment options available in the global market for investors:
GOLD
Advantages
Stable & STEADY
History shows us that gold is a very steady and stable investment option in the longer run, and for investors who intend to keep an asset under their portfolio with an intention of long-term investments. The value of gold has also shown an uptrend with time over the years while showing significant price surges whilst the global economy goes into recession.
Also, because gold has been used as a reserve currency for a relatively very long amount of time, therefore it also proves to be a reliable investment. visit the BitQL app if you are interested in investing in crypto and making huge gains by trading it online via automated trading.
KEPT SAFELY IN VAULTS/LOCKERS
There are different security and safety services provided by places such as security companies and even banks, which provide storage facilities to their users.
These institutions manage the accounts of these customers and safeguard their customer’s gold, which is kept inside safe vaults and lockers, overlooked by layers of securities, which are quite difficult to penetrate. This enables the customers to safely keep their investments secured inside a bank account, without worrying about its safety.
Disadvantages
inability to be utilized as a CURRENCY
Although it might be possible for gold to be utilized as a currency, one rare instance when this could occur is when the conventional fiat currency becomes unusable or obsolete during a severe global economic crisis.
Nonetheless, currently, gold cannot be generally used to buy any product or service in a direct exchange, nor is gold a mainstream payment option. Although some of the gold coins are considered as a currency, the value of the gold coin is usually greater than the coin’s face value.
The necessity of being stored
Upon the ownership of a precious metal such as gold, you cannot generally carry it around nor can you keep it as openly as you do some of your other assets, due to the risk of getting stolen. It is a necessity to store your gold inside a well-safeguarded and secured place such as a vault or locker.
However, it is not illegal or impossible for you to store your gold inside your own home. But if you do so, make sure to lock it inside a vault guarded by a strong passcode and keep it under observation. There is still a chance that it might get stolen from there, as incidents in the past show.
BITCOIN
Advantages
High liquidity
Since bitcoin is a digital asset, it can be electronically transferred to other users and also sold for the prevailing price of the coin, any denominated currency.
Other options for transferring or sending a BTC amount to another user could be by meeting them in person and transferring the amount by scanning the QR code via your phone or sending BTC via a third-party service that provides a platform for exchange services.
Usable as a currency
Given that you have access to a digital wallet via a mobile wallet app that enables you to pay through BTC, your crypto can be utilized as a payment method to pay for things at stores that do accept BTC as a payment method.
Although currently bitcoin is not used as a mainstream payment option across the markets, this trend is increasing as big names like Microsoft have started accepting BTC payments.
Many Giant businesses are accepting Crypto Currency as one of their payment methods. The crypto press release is the best way to stay updated with crypto news and its market movement.
Read Also: Mobile Payments: The Future of Cashless Transactions
constantly DEVELOPING
We speak relatively when we say that bitcoin has been invented and around in the market for just over a decade. Due to this, BTC is considered to be a developing and evolving investment option as its price is expected to surge exponentially over the next few years.
It should be noted that BTC is a very lucrative investment option, and investing in it right now could reap great returns for you in the future.
There have been lots of investors who have already cashed out of their BTC investments and made millions, while some others still hold it hoping to make even more in the long term.
DisAdvantages
Volatility
One of the key features and unavoidable drawbacks of BTC is the price fluctuation in its price per coin, which is also referred to as ‘volatility’. This is also due to the fact that BTC is considered to be an emerging investment asset. It should be known, however, that all those investments, such as BTC, which have a high return for the investors, also have an equivalent high amount of risk associated with the investment.
vulnerable to threats such as SCAMS or STEALING
Although bitcoin is a digital asset, it requires it to be stored as well. The options available currently for you to store your bitcoin are a digital mobile wallet, inside a physical portable hard drive or on a web platform. Although there are several advantages associated with each storage option, there are certain drawbacks too. For example, your bitcoins can be stolen if your account or wallet on a web portal are hacked. As far as the physical storage options are concerned, in event of a misplacement or loss of your flash drive or hard drive, you will lose all your bitcoins stored inside it.
