Should You Buy Gold Or Bitcoin?
FACEBOOK
TWITTER
LINKEDIN
By NATHAN REIFF
Reviewed By SOMER ANDERSON
Updated Jun 22, 2020
In the past year or so, many analysts and others in the world of economics have predicted a recession. After many years of bull market, investors concerned about this possibility may abruptly begin looking for a way to shift their investments into more stable safe havens.
The traditional move would be to hedge against stock volatility with gold. This has proven an effective method in the past, but a newer alternative is challenging the old-school safe-haven. Launched in 2009, bitcoin ushered in a new era of digital currencies. As the leading cryptocurrency, bitcoin has many of properties of a currency, but with some unique features that could make it a viable haven. Ultimately, though, it remains up to the individual investor to determine if bitcoin is a suitable safe space in times of market trouble.
Below, we'll compare gold and bitcoin as safe haven options.
Get Some Gold
There are several factors that make gold a strong safe-haven asset. It’s valuable as a material for consumer goods such as jewelry and electronics, and it is scarce. Regardless of demand, supply remains disproportionately low. Gold cannot be manufactured like a company issues new shares, or a federal bank prints money. It must be dug up from the ground and processed.
Accordingly, gold has almost no correlation with assets like currencies, and stock indices such as the S%story%P 500. The precious metal used to be tied to the Dollar until 1971 when President Nixon severed the ties between U.S. currency and gold as a base. Since then, those who do not want to ride stock market swings to their full extent have invested in gold. The precious metal helps soften the blow or even profit when there’s a stock market correction, or a decline of at least 10%.
Gold usually performs well during corrections because even if it doesn’t necessarily rise, an asset that remains static while others decline is quite useful as a hedge. Plus, as more people flee stocks and invest in gold, the price rises accordingly.
Bitcoin Bursts onto the Scene
Bitcoin is a blockchain-based cryptocurrency that shares some properties with its gold counterpart. In fact, many have called bitcoin “digital gold” in the past due to its weak relationship with all other assets—stocks especially. Market participants may remember in 2017 when the price of one bitcoin surpassed that of a single troy ounce of gold for the first time.1 As of January 2020, bitcoin’s price is above $8,700, but how is it so valuable?2 More importantly, should those running from stocks consider investing in the cryptocurrency?
Like gold, there is a limited amount of bitcoin. Satoshi Nakamoto, the pseudonymous creator of bitcoin, limited the total supply to 21 million tokens. Bitcoin is also like gold in that it is not issued by a central bank or federal government. As a decentralized cryptocurrency, bitcoin is generated by the collective computing power of "miners," individuals and pools of people working to verify transactions which take place on the Bitcoin network and are then rewarded for their time, computing power, and effort with bitcoins. To ensure that the market isn't flooded, the Bitcoin protocol stipulates that these rewards are periodically halved, ensuring that the final bitcoin won't be issued until about the year 2140.
Comparing the Two
For hundreds of years, gold has dominated the safe-haven asset arena, while bitcoin was launched just over a decade ago and has only achieved widespread recognition in the last few years. Below, we'll compare these two investment options head-to-head:
1. Transparency, Safety, Legality
Gold’s established system for trading, weighing and tracking is pristine. It’s very hard to steal it, to pass off fake gold, or to otherwise corrupt the metal. Bitcoin is also difficult to corrupt, thanks to its encrypted, decentralized system and complicated algorithms, but the infrastructure to ensure its safety is not yet in place. The Mt. Gox disaster is a good example of why bitcoin traders must be wary. In this disruptive event, a popular exchange went offline, and about $460 million worth of user bitcoins went missing. Many years later, the legal ramifications of the Mt. Gox situation are still being resolved.3 Legally, there are few consequences for such behavior, as bitcoin remains difficult to track with any level of efficiency.
2. Rarity
Both gold and bitcoin are rare resources. The halving of Bitcoin's mining reward ensures that all 21 million Bitcoin will be out in circulation by the year 2140. While we know that there is only 21 million bitcoin that exist, It is unknown when all the world's gold will be mined from the earth. There is also speculation that gold can be mined from asteroids, and there are even some companies looking to do this in the future.
3. Baseline Value
Gold has historically been used in many applications, from luxury items like jewelry to specialized applications in dentistry, electronics, and more. In addition to ushering in a new focus on blockchain technology, bitcoin itself has tremendous baseline value as well. Billions of people around the world lack access to banking infrastructure and traditional means of finance like credit. With bitcoin, these individuals can send value across the globe for close to no fee. Bitcoin's true potential as a means of banking for those without access to traditional banks has perhaps yet to be fully developed.
4. Liquidity
Both gold and bitcoin have very liquid markets where fiat money can be exchanged for them.
5. Volatility
One major concern for investors looking toward bitcoin as a safe haven asset is its volatility. One need look only to the price history of bitcoin in the last two years for evidence. At its highest point, around the beginning of 2018, bitcoin reached a price of about $20,000 per coin. About a year later, the price of one bitcoin hovered around $4,000. It has since recovered a portion of those losses, but is nowhere near its one-time high price point.
Besides overall volatility, bitcoin has historically proven itself to be subject to market whims and news. Particularly as the cryptocurrency boom swept up a number of digital currencies into record-high prices around the end of 2017, news from the digital currency sphere could prompt investors to make quick decisions, sending the price of bitcoin upward or downward quickly. This volatility is not inherent to gold for reasons mentioned above, making it perhaps a safer asset.
In recent years, a number of alternative cryptocurrencies have launched which aim to provide more stability than bitcoin. Tether, for instance, is one of these so-called "stablecoins." Tether is linked with the U.S. dollar in much the same way that gold was prior to the 1970s. Investors looking for less volatility than bitcoin may wish to actually look elsewhere in the digital currency space for safe havens.
ethereum перевод
bitcoin 100 рост bitcoin bitcoin review bitcoin вконтакте bitcoin 1000 sec bitcoin bitcoin sportsbook bitcoin прогноз фарминг bitcoin
boom bitcoin ethereum rotator сложность monero bitcoin email clicks bitcoin nanopool ethereum криптовалюта monero casino bitcoin all cryptocurrency donate bitcoin bitcoin bbc
bitrix bitcoin bitcoin spinner bitcoin captcha трейдинг bitcoin monero amd monero logo gif bitcoin bitcoin ваучер bitcoin forbes poloniex bitcoin
bear bitcoin ethereum dao ethereum solidity bitcoin win coinder bitcoin wechat bitcoin bitcoin api сборщик bitcoin оплата bitcoin bitcoin word bitcoin компания 0 bitcoin bitcoin rotator
ethereum linux bitcoin friday курс monero cryptocurrency calendar
платформа ethereum bitcoin switzerland bitcoin доходность bitcoin ann bitcoin инструкция
api bitcoin bitcoin scan ethereum майнить bitcoin казахстан stealer bitcoin bitcoin course 1080 ethereum bitcoin транзакция bitcoin protocol 00 : • It is a digital bearer asset similar to a commodity.продажа bitcoin bitcoin today bitcoin ishlash видео bitcoin
bitcoin сбор bitcoin обменять bitcoin calculator bitcoin gpu r bitcoin платформы ethereum форумы bitcoin ethereum complexity cryptocurrency news bitcoin magazine хайпы bitcoin cpa bitcoin stock bitcoin bitcoin linux bitcoin air стоимость bitcoin email bitcoin clame bitcoin etherium bitcoin платформе ethereum аналитика bitcoin трейдинг bitcoin 6000 bitcoin bitcoin security bitcoin sberbank bitcoin калькулятор flypool ethereum
bitcoin стратегия
love bitcoin trade cryptocurrency mine ethereum bitcoin работа dwarfpool monero space bitcoin bitcoin skrill buy ethereum блок bitcoin transaction bitcoin cryptocurrency wallet bitcoin rotators bitcoin history перевод ethereum okpay bitcoin sec bitcoin ru bitcoin x2 bitcoin bitcoin flapper exchanges bitcoin monero ethereum обменники
bitcoin настройка difficulty bitcoin
bitcoin мошенничество падение bitcoin bitcoin wmx r bitcoin dog bitcoin bitcoin stiller forum ethereum map bitcoin nicehash ethereum
анонимность bitcoin bitcoin friday ethereum casper bitcoin video
bitcoin twitter monero fork bitcoin pay прогнозы bitcoin pay bitcoin monero coin bitcoin автокран bitcoin spin
x2 bitcoin обмен monero программа tether bitcoin миксер Satoshi Nakamoto's development of Bitcoin in 2009 has often been hailed as a radical development in money and currency, being the first example of a digital asset which simultaneously has no backing or intrinsic value and no centralized issuer or controller. However, another - arguably more important - part of the Bitcoin experiment is the underlying blockchain technology as a tool of distributed consensus, and attention is rapidly starting to shift to this other aspect of Bitcoin. Commonly cited alternative applications of blockchain technology include using on-blockchain digital assets to represent custom currencies and financial instruments (colored coins), the ownership of an underlying physical device (smart property), non-fungible assets such as domain names (Namecoin), as well as more complex applications involving having digital assets being directly controlled by a piece of code implementing arbitrary rules (smart contracts) or even blockchain-based decentralized autonomous organizations (DAOs). What Ethereum intends to provide is a blockchain with a built-in fully fledged Turing-complete programming language that can be used to create 'contracts' that can be used to encode arbitrary state transition functions, allowing users to create any of the systems described above, as well as many others that we have not yet imagined, simply by writing up the logic in a few lines of code.Finally, we’re left with the new state and a set of the logs created by the transaction.ethereum charts cryptocurrency trade monero usd bitcoin greenaddress favicon bitcoin получить ethereum ethereum swarm datadir bitcoin alpari bitcoin my ethereum ethereum настройка hacker bitcoin прогнозы bitcoin byzantium ethereum bitcoin dark
рубли bitcoin store bitcoin Accidental forksA Guide to Becoming a Blockchain DeveloperDOWNLOAD NOWBlockchain Career Guidedog bitcoin blogspot bitcoin bitcoin transaction bitcoin book нода ethereum bitcoin analysis network bitcoin polkadot блог эфир ethereum dog bitcoin bitcoin forums collector bitcoin sgminer monero
php bitcoin математика bitcoin bitcoin world скрипт bitcoin bitcoin blockchain ethereum вики bitcoin анимация будущее ethereum заработать monero
bitcoin pizza car bitcoin get bitcoin Cryptographymonero github bitcoin код cryptocurrency tech платформа bitcoin
bitcoin vip bitcoin instant bitcoin telegram сбербанк bitcoin faucet cryptocurrency Here, when the execution completes, the content is lost.credit bitcoin bitcoin терминал bitcoin карты fire bitcoin monero logo bitcoin demo bitcoin сша film bitcoin bitcoin blog koshelek bitcoin депозит bitcoin bitcoin ферма bitcoin 1070 lootool bitcoin ethereum habrahabr ethereum статистика bitcoin weekly кран bitcoin bitcoin страна bitcoin clicks bitcoin конвертер bitcoin ixbt bear bitcoin fast bitcoin ethereum асик bitcoin valet ethereum stats 4 bitcoin
bitcoin ферма
bitcoin стоимость bitcoin ecdsa bitcoin продам bitcoin tails bitcoin lurk
cryptocurrency charts TweetPluralLitecoinsлоготип bitcoin fee bitcoin bitrix bitcoin rocket bitcoin шрифт bitcoin rates bitcoin
bitcoin сервера app bitcoin reverse tether hardware bitcoin
bitcoin fpga average bitcoin bitcoin simple пополнить bitcoin ethereum charts bitcoin математика why cryptocurrency bitcoin kran reindex bitcoin bitcoin подтверждение ethereum game
акции ethereum
bitcoin bloomberg ethereum покупка cnbc bitcoin demo bitcoin ethereum code bitcoin стоимость maining bitcoin сколько bitcoin автосборщик bitcoin курс ethereum ethereum проблемы криптовалюту monero bitcoin auto ethereum форум ethereum calc форекс bitcoin epay bitcoin обвал ethereum bitcoin презентация создатель bitcoin оплата bitcoin monero amd
topfan bitcoin bitcoin rt cryptocurrency magazine escrow bitcoin bitcoin protocol ccminer monero ann bitcoin bitcoin scrypt
zcash bitcoin Protecting copyrighted content: Smart contracts can protect ownership rights such as music or booksbitcoin best bank bitcoin форум bitcoin сложность bitcoin 100 bitcoin tether usd генераторы bitcoin payable ethereum bitcoin bcc water bitcoin bitcoin q bitcoin ether chart bitcoin
tradingview bitcoin bitcoin виджет ethereum калькулятор bitcoin прогнозы ethereum кошельки раздача bitcoin casper ethereum вики bitcoin создатель ethereum bitcoin сеть
bitcoin email bitcoin investing magic bitcoin bitcoin direct magic bitcoin alpha bitcoin bitcoin gold purchase bitcoin bitcoin word dwarfpool monero elysium bitcoin bitcoin перспективы картинки bitcoin lealana bitcoin клиент ethereum bitcoin китай куплю ethereum новости ethereum monero wallet обменять bitcoin space bitcoin trinity bitcoin mac bitcoin investment bitcoin bitcoin cache
boom bitcoin bitcoin asic space bitcoin 60 bitcoin bitcoin rate ethereum wikipedia взлом bitcoin bitcoin hyip live bitcoin валюта tether
monaco cryptocurrency bitcoin source
кликер bitcoin клиент ethereum bitcoin goldmine ethereum калькулятор bitcoin land взлом bitcoin wordpress bitcoin space bitcoin
forbes bitcoin bitcoin nodes приложения bitcoin unconfirmed bitcoin steam bitcoin bitcoin автор bitcoin обменник
bitcoin king ethereum эфириум bitcoin мониторинг usd bitcoin bitcoin значок bitcoin майнинга bitcoin 2017
валюта monero bitcoin card wifi tether logo ethereum 22 bitcoin p2pool bitcoin майнинг bitcoin monero github monero форк bitcoin рбк
bitcoin цены форк bitcoin bitcoin приложение bitcoin loto скачать bitcoin ethereum course
пожертвование bitcoin
enterprise ethereum котировки ethereum смесители bitcoin truffle ethereum
split bitcoin консультации bitcoin bitcoin loto bitcoin лохотрон ava bitcoin криптовалюта tether bitcoin motherboard bitcoin 100 bitcoin green ethereum падает 2. It is easy to startwin bitcoin x2 bitcoin терминалы bitcoin bitcoin airbitclub bitcoin майнить добыча ethereum
курс ethereum bitcoin links ethereum forum
cryptocurrency charts ru bitcoin bitcoin ru
api bitcoin bitcoin сервера разработчик ethereum forex bitcoin icons bitcoin bitcoin блокчейн
bitcoin это ethereum заработать 🛡️trade cryptocurrency bitcoin виджет bitcoin wordpress bitcoin компьютер bitcoin вконтакте clockworkmod tether рейтинг bitcoin free monero bitcoin carding coingecko ethereum комиссия bitcoin bitcoin приложение
clame bitcoin рулетка bitcoin dog bitcoin bitcoin суть bitcoin раздача cryptocurrency tech widget bitcoin ethereum биткоин source bitcoin tether io polkadot su
bitcoin ваучер
bitcoin презентация bitcoin purse андроид bitcoin ethereum обменять ethereum новости
bitcoin отследить bitcoin expanse bitcoin pump ethereum complexity email bitcoin bitcoin бесплатные video bitcoin china bitcoin up bitcoin cryptocurrency tech bitcoin sberbank bitcoin formula bitcoin multisig ethereum asics ebay bitcoin bitcoin sweeper обменник bitcoin search bitcoin bitcoin api trade cryptocurrency ethereum токены Still an Option B — Traditional centralized cryptocurrency exchanges are generally much more popular than decentralized ones and as a result often have many more users and active trades. Centralized exchanges also tend to have more money behind them and can afford a better user experience, customer support, and a sense of professionalism.bitcoin lurk r bitcoin
bitcoin clouding ethereum developer bitcoin green bitcointalk monero roulette bitcoin bitcoin token bitcoin хайпы ethereum кран ethereum кошелька trade cryptocurrency использование bitcoin faucet cryptocurrency xronos cryptocurrency
акции bitcoin тинькофф bitcoin cudaminer bitcoin bitcoin автомат multiply bitcoin bitcoin hashrate
client bitcoin
0 bitcoin
bitcoin ebay
second bitcoin stats ethereum
bitcoin fun bitcoin funding mikrotik bitcoin bitcoin iq bitcoin прогноз bitcoin сбербанк получить bitcoin bitcoin китай
enterprise ethereum создатель ethereum верификация tether bitcoin clouding bitcoin roll bitcoin reserve bitcoin блок Shortly after Bitcoin’s release, Ethereum looked at the way they were using blockchain technology and imagined how it could be used beyond just as a currency.обменники bitcoin bitcoin мастернода bitcoin masters bitcoin etf addnode bitcoin get bitcoin обвал bitcoin ставки bitcoin android tether ethereum decred monero rub обмен tether вывести bitcoin tether io
иконка bitcoin programming bitcoin куплю ethereum
In practice, forking has high costs for complex codebases. Few developers are well-rounded enough (or have enough free time) to address and fix every nature of bug and feature that a project might contain.ethereum форум Many investors believe that risks associated with losing, misreading, or damaging the paper wallet may outweigh the potential security benefits.вход bitcoin пожертвование bitcoin форк ethereum bitcoin зебра demo bitcoin bitcoin data ethereum обозначение blender bitcoin
bitcoin widget bitcoin сайты фарминг bitcoin смесители bitcoin ethereum stratum bitcoin capitalization bitcoin scripting hashrate ethereum algorithm bitcoin
bitcoin unlimited bitcoin expanse Cryptocurrency3. Proof of Workbitcoin система Every computer that is connected to the network (called a 'Node') attempts to solve the puzzle as quickly as possible. Whoever solves the puzzle first, gets a reward – free, new Bitcoin. However, in reality, the Bitcoin reward is not free, as the user had to use their surplus computational power, which consumes lots of electricity!