Bitcoin versus gold: This question has been at the top of many investors’ minds for many years. On the one hand, we have gold, which has been tried and true. Gold has never disappointed and has proven itself as a solid way to store value. On the other hand, Bitcoin is a digital asset and relatively new. Many believe that Bitcoin is destined to become bigger than the analog version.
Read on to learn more about which one of these two assets is the better option for a store of value.
Comparison of Price
Starting with everyone’s favorite metric, price, gold’s price history starts with human civilization itself. Since ancient times, gold has carried value. As for Bitcoin, its value was technically zero when the first BTC coins were mined in 2009. The earliest recorded price of Bitcoins in trading was only nine cents.
Volatility of Bitcoin
You should know that Bitcoin’s price action has been extremely volatile. This aspect puts the store value of Bitcoin into question. Also, relative to gold, Bitcoin is brand new. If you look at history, you realize that gold has essentially outlasted every other asset or currency that has ever existed.
Despite the fact that gold’s price hasn’t performed as well as that of Bitcoin, its track records suggest that gold will continue to exist long after Bitcoin is gone. If this aspect serves as inspiration, then you might want to check out how to invest in gold for better store value.
Supply And Demand
Another metric to consider while gauging the value of gold versus Bitcoin is economics, which is essentially about supply and demand. The supply of Bitcoin is programmatically fixed. Also, the supply schedule for Bitcoin is predetermined, as every ten minutes, new coins are created. When it comes to the demand for Bitcoin, there are many ways to measure it.
One way to measure the demand for Bitcoin is the number of Bitcoin wallets that hold an amount of BTC greater than zero. As far as gold is concerned, the exact supply of this costly metal is unknown. The average gold demand is about three thousand tons annually. This demand has increased due to record gold buying by central banks.
Everyone Acknowledges the Value of Gold
While it is not quite possible to gauge the number of people who own gold, it’s safe to state that everyone on the planet understands and acknowledges the value of gold. This aspect is quite evident in the fact that every country sells gold jewelry. However, by contrast, only a small percentage of people understand and acknowledge the value of Bitcoin and other cryptocurrencies.
This aspect indicates that Bitcoin has more room to grow on the demand side.
The Final Verdict
Besides being a store of value and historically being used as a currency, the primary use case of gold is jewelry. However, you can buy digital gold in the form of coins. You can even buy and store gold for as little as five dollars. Gold has always been and still is a safe haven as it gains value and serves as a hedge against inflation.
0
0