Gold or Bitcoin: which one is the best investment?
In these unstable and challenging times, many are looking for assets not affected by the fiat currency printing press. For many years, people have used precious metals for this. However, now other tools allow not only to save but also to multiply savings. Guess what we’re talking about?
Exactly! One of these tools is cryptocurrencies. Digital currencies are now at their peak, and their value is reaching all-time highs.
However, for many people, cryptocurrencies are still an obscure asset. Why some cryptocurrencies can become a full-fledged alternative to gold and precious metals — read on.
One of the most popular cryptocurrencies is, obviously, Bitcoin. Do not forget that it was the very first cryptocurrency. BTC was created in 2008 by a person or group of people under the name Satoshi Nakamoto. Since the establishment, the value of Bitcoin has grown many, many times over.
The first purchase for Bitcoins was pizza, which cost a few coins, and in 2021 the value of the cryptocurrency exceeded $ 50,000. Today, Bitcoin is called the “gold of the crypto market”, as investors began to use this cryptocurrency as a means to preserve their assets. There are several reasons for this.
As you know, gold reserves are limited. The world’s industrial reserves of gold are 63 thousand tons, and the total resources are 120 thousand tons. Bitcoin emission is limited as well. The block generation algorithm for Bitcoin is limited to about 21 million units.
It means that, following the laws of classical economics, the supply of both gold and Bitcoin will decrease over time, and if demand persists, the value of these assets will rise.
Gold is used in many economic activities, from the traditional jewelry industry to electronics, where, if you didn’t know, electrical contacts are made from gold alloys.
However, with the growth of technology, there are more and more materials that can replace gold. For example, if earlier gold was used in dentistry, today ceramic implants have successfully replaced gold teeth. Besides, it should be added that gold cannot be used to buy goods in an ordinary supermarket. Bitcoin, on the other hand, is more flexible in usage.
First of all, Bitcoin is a payment system and a means of payment. More and more countries begin to recognize cryptocurrencies, in particular Bitcoin, as a payment method. You do not need to stand in long bank queues or rely on bank working hours; all transactions go through much faster. Blockchain is enough, and it reduces associated costs.