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The Covid-19 pandemic has given us a lot of lessons about a number of dimensions of life, but among them, the most important lesson that it has taught us is about savings and investment. Those who have made calculated and wise decisions on money matters were the ones whose lifestyles were not compromised during the difficult phase of the lockdown. Now once we are talking about investment, let us do a comparison on two investment prospects: Gold vs Bitcoin.
What was witnessed during the pandemic was that people shifted towards assets that are a safe haven. Gold investments have yielded good returns. But decreasing the glitters of yellow metal, even better returns were yielded by digital currency.
Before, the traditional shift was to hedge against stock fluctuations with gold. It was a very effective method in the past, but now there has been the emergence of a new alternative which is challenging the safe haven method of the old school.
Why Is Gold Preferred?
In the comparison of Gold vs Bitcoin, we will first evaluate the benefits of each commodity before we draw a distinction between the two.
- The yellow metal consists of high value as a material for the goods of the consumers like jewelry and it is not available in abundance.
- Despite the demand, the supply disappointedly stays low.
- Manufacturing of gold is not possible. A new share can be issued by a company, dollar bills can be printed by the Federal Bank but with gold, the scenario is not the same. It has to be dug up from the ground and then get it processed.
Why Is Bitcoin Preferred?
- Bitcoin is a digital currency that is based on blockchain and shares some properties with gold. In fact many term Bitcoin as “digital gold” before for its weak relationship with all other assets, especially with stocks.
- Gold is limited, similarly, there are limited amounts of Bitcoin in the market.
Bitcoin Vs Gold: The Comparison
- If we compare gold and Bitcoin on transparency, legality, and safety then gold holds a higher position than Bitcoin.
- As per rarity, both these commodities are rare.
- As per as liquidity in Gold vs Bitcoin is concerned, both are good.
- If we talk about volatility, Bitcoin being a digital currency is much more volatile than gold. Gold has a long history of being less fluctuating than digital currencies.
- Gold is accessible to people of all economic standards and technical understanding. Whereas this case is not the same with cryptocurrency.
- And finally, always remember the ultimate currency of central banks is Gold.
Gold vs Bitcoin Chart Comparison
Now that you have got an idea about the comparison, and have started to create your side of the verdict let us have a look at the Gold vs Bitcoin chart 2021, which will ease your understanding more.
| SL.No | Parameters | Gold | Bitcoin |
|---|---|---|---|
| 1. | Transparency, Safety, Legality | More transparent, safe and legal in every part of the world. | Less transparent, more prone to hack, and still not legal in many countries. |
| 2. | Rarity | Rare | Rare |
| 3. | Baseline Value | High baseline value | High baseline value |
| 4. | Liquidity | Highly liquid | Highly liquid |
| 5. | Volatility | Very less volatile | Highly volatile in nature. |
Final Verdict
Even though in the Gold vs Bitcoin comparison, Gold has seen more benefits compared to Bitcoin, Bitcoin has registered 100X developments over gold in terms of a store of value. The world is understanding this and is starting to adopt the idea of digital currency investments. It is expected that the market of Bitcoin will suppress the market cap of gold by 2030.
Frequently Asked Questions On Gold vs Bitcoin
1. Is gold better than Bitcoin?
The yellow metal consists of high value as a material for the goods of the consumers like jewelry and it is not available in abundance. But despite the demand, the supply disappointedly stays low.
2. Can Bitcoin overtake gold?
The world is understanding the value of the digital currency and is starting to adopt the idea of digital currency investments. It is expected that the market of Bitcoin will suppress the market cap of gold by 2030.
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