5 reasons why Bitcoin could be a better long-term investment than gold

Gold has been a valued commodity for decades and is the most common form of currency used in trades. Gold’s value fluctuates based on supply, demand, government policies and economic factors. Bitcoin functions as money that is decentralized to avoid centralized manipulation like gold does. Here are five reasons why you should consider investing your time or money into Bitcoin now instead of waiting around for gold prices to go up again

The “will crypto affect gold” is a question that has been asked many times. The answer to the question, is no. Gold will not be affected by cryptocurrency because it is too slow and expensive to mine.

Many financial professionals have recommended investing in gold to hedge against volatility and a likely decrease in the value of the US dollar as a result of the appearance of forty-year high inflation readings and the increasingly bleak outlook for the global economy. 

Bitcoin (BTC) has been dubbed “digital gold” by crypto traders for years, but is it a better investment than gold? Let’s look at some of the common reasons used by investors to defend gold as an investment, and why Bitcoin could be a superior long-term alternative.

Retention of value

One of the most prominent justifications for purchasing gold and Bitcoin is that they have a track record of maintaining their value during periods of economic turmoil.

This is a well-known fact, and there’s no doubting that gold has historically provided some of the finest asset protection, but it doesn’t always hold its worth. Gold merchants have also been subjected to protracted periods of price drops, as seen in the graph below.

5 reasons why Bitcoin could be a better long-term investment than goldThe cost of gold. TradingView is the source of this information.

For example, someone who purchased gold in September 2011 would have to wait until July 2020 to be back in the black, and if they kept holding, they would be near even or underwater once again.

Bitcoin’s price has never taken more than three to four years to recoup and exceed its all-time high, indicating that on a long-term basis, BTC might be a superior store of wealth.

Is Bitcoin a stronger inflation hedge than other currencies?

Because gold’s price tends to grow in tandem with rises in the cost of living, it was formerly thought to be an excellent inflation hedge.

However, a deeper examination of the gold-to-Bitcoin chart reveals that, although gold has climbed by 21.84 percent in the last two years, the price of Bitcoin has increased by 311 percent.

5 reasons why Bitcoin could be a better long-term investment than goldOne-day chart of gold vs. BTC/USDT. TradingView is the source of this information.

Holding an asset that can outrun growing inflation helps create wealth rather than preserve it in a society where the general cost of living is rising faster than most individuals can bear.

While the volatility and price drops in 2022 were unpleasant, investors with a multi-year time horizon have seen substantially greater potential in Bitcoin.

During times of global unrest, Bitcoin may resemble gold.

Gold, sometimes known as the “crisis commodity,” is well-known for holding its value during times of geopolitical turmoil, with individuals known to invest in gold as global tensions mount.

Because gold is known as the “crisis metal,” I expect gold will rise in value as a commodity if we enter another recession.

April 22, 2022 — Scott Hempstead (@scottytrip1)

Carrying costly things is a dangerous idea for persons living in war zones or other unstable locations, since they may be exposed to asset seizures and theft.

For individuals in this position, Bitcoin is a safer alternative since they can learn a seed word and travel without concern of losing their money. They may reassemble their wallet and have access to their money once they arrive at their destination.

The digital nature of Bitcoin, as well as the availability of many decentralized markets and peer-to-peer exchanges such as LocalBitcoins, makes Bitcoin more accessible.

The dollar continues to depreciate in value.

In recent months, the US dollar has been strong, but this is not always the case. Investors have been known to rush to gold and Bitcoin when the dollar’s value declines versus other currencies.

If other nations continue to shift away from a U.S. dollar-centric strategy in favor of a more multipolar one, there may be a considerable amount of dollar flight, but those monies will not be invested in weaker currencies.

While gold has been the go-to asset for millennia, it is no longer commonly utilized or acknowledged in our current digital culture, and most younger generations have never seen a gold coin.

Bitcoin is a more familiar alternative for these groups, since it can be integrated into people’s digitally-infused routines and does not need additional security or physical storage.

Argentines are turning to Bitcoin in the face of rising inflation, according to a new report.

Bitcoin is in a state of scarcity and deflation.

Scarcity and supply limits for gold, as a result of years of diminishing output, are cited by many investors and financial professionals as reasons why gold is a smart investment.

A new mine may take five to 10 years to achieve production, so quick increases in supply are improbable, and central banks halted their gold sales dramatically in 2008.

However, it is believed that there is still over 50,000 metric tons of gold in the earth, which miners would gladly concentrate on mining if prices rose significantly.

The promised realm of ‘genuine scarcity’ will never be reached by gold. The more the price rises, the more it is mined, boosting supply and lowering the price. #gold #goldprice #bitcoin

March 7, 2022 — DeepSee-er (@ErDeepsee)

Bitcoin, on the other hand, has a finite amount of 21 million BTC that will never be generated, and its issuance occurs at a predictable pace. The Bitcoin blockchain’s public nature enables the location of every Bitcoin to be known and confirmed.

There will never be a method to really find and authenticate all of the gold stores on the earth, which means the actual supply will never be known. As a result, Bitcoin easily wins the scarcity argument, and it is the most difficult form of money ever devised by humanity.

Do you want to learn more about trading and investing in the crypto markets?

The author’s thoughts and opinions are completely his or her own and do not necessarily represent those of Cointelegraph.com. Every investing and trading choice has risk, so do your homework before making a decision.

Bitcoin is a cryptocurrency that has been gaining popularity over the years. Bitcoin has many benefits over gold, including being decentralized and having no central bank to control it. Gold does have some advantages as well, but bitcoin is catching up quickly. Reference: when will bitcoin overtake gold.

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