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.
In this section, we will discuss how Satoshi Nakamoto innovated on top of existing open allocation governance processes in order to make them robust enough to govern a currency system.bitcoin hunter registration bitcoin captcha bitcoin bitcoin сервисы bitcoin vector
bitcoin save
exchange bitcoin konvertor bitcoin space bitcoin genesis bitcoin ethereum калькулятор bitcoin алгоритм r bitcoin bitcoin конвертер What is SegWit and How it Works Explainedtoken bitcoin инструкция bitcoin bitcointalk monero bitcoin hardware by bitcoin antminer bitcoin lazy bitcoin difficulty ethereum bitcoin начало addnode bitcoin best bitcoin продам bitcoin зарегистрироваться bitcoin linux bitcoin by Brad Stephensonbitcoin heist 2. How many cryptocurrencies are there? What are they worth?my ethereum bitcoin main miningpoolhub monero rush bitcoin bitcoin double
bitcoin zona bitcoin forex
ethereum myetherwallet card bitcoin bitcoin magazin ethereum miner график ethereum сигналы bitcoin bitcoin pro bitcoin страна Zcash offers total payment confidentiality while still maintaining a decentralized network using a public blockchain. Zcash transactions automatically hide the sender, recipient and value of all transactions on the blockchain. Only those with the correct view key can see the contents of a transaction. Since the contents of Zcash transactions are encrypted and private, the system uses a novel cryptographic method to verify payments.monero fee ninjatrader bitcoin bitcoin 20 payable ethereum pokerstars bitcoin ethereum цена balance bitcoin monero пул bitcoin зарегистрироваться ethereum complexity bitcoin store сбор bitcoin bitcoin analysis
pokerstars bitcoin monero вывод stealer bitcoin cryptocurrency nem bitcoin compare
bitcoin пожертвование платформу ethereum
cryptocurrency ethereum swiss bitcoin tether отзывы инструкция bitcoin japan bitcoin программа tether капитализация bitcoin mine ethereum bitcoin баланс
bitcoin motherboard кошелька bitcoin блоки bitcoin gps tether flypool ethereum понятие bitcoin bitcoin карты обмен tether galaxy bitcoin bitcoin future вики bitcoin 4pda tether bitcoin переводчик space bitcoin робот bitcoin bitcoin видеокарты сборщик bitcoin bitcoin betting amazon bitcoin bitcoin 1070 ethereum classic
bitcoin pos ethereum nicehash tether korbit bitcoin bitcoin видеокарты bitcoin страна
cryptocurrency mining bitcoin magazin
half bitcoin bitcoin окупаемость space bitcoin bitcoin banks bitcoin торрент casinos bitcoin avto bitcoin nubits cryptocurrency
робот bitcoin monero free torrent bitcoin оплата bitcoin майнинга bitcoin bitcoin future doubler bitcoin linux ethereum
bitcoin fpga bitcoin войти покер bitcoin It's worth noting that it is projected to take more than 100 years before the bitcoin network mines its very last token. In actuality, as the year 2140 approaches, miners will likely spend years receiving rewards that are actually just tiny portions of the final bitcoin to be mined. The dramatic decrease in reward size may mean that the mining process will shift entirely well before the 2140 deadline.bitcoin click buying bitcoin Proceeding Together Apaceобмен tether free ethereum
bitcoin доходность monero калькулятор bitcoin instagram bitcoin golang bitcoin utopia
обменники bitcoin bitcoin casino майнеры monero people bitcoin
ethereum обменять ethereum investing bestexchange bitcoin okpay bitcoin
ethereum telegram bitcoin прогнозы payable ethereum bitcoin проверить bitcoin 123 bitcoin conveyor теханализ bitcoin bitcoin play etoro bitcoin ethereum course bitcoin trezor ethereum получить халява bitcoin blocks bitcoin bitcoin community web3 ethereum
bitcoin server капитализация ethereum
atm bitcoin bitcoin монет simple bitcoin bitcoin count капитализация bitcoin
ico cryptocurrency free bitcoin bitcoin ecdsa bitcoin mmgp казино bitcoin bitcoin бот е bitcoin tracker bitcoin ethereum краны why cryptocurrency ethereum контракт кошельки bitcoin
bitcoin indonesia
linux ethereum bitcoin click ethereum russia
key bitcoin отзыв bitcoin bitcoin играть ютуб bitcoin рост ethereum bitcoin фильм ethereum картинки
bitcoin gift boom bitcoin bitcoin будущее bitcoin farm суть bitcoin портал bitcoin википедия ethereum bitcoin шахты bitcoin пирамида nicehash bitcoin ethereum myetherwallet bitcoin тинькофф bitcoin carding registration bitcoin купить bitcoin блокчейна ethereum эпоха ethereum партнерка bitcoin bitcoin free ethereum testnet bitcoin fork
сети ethereum ethereum algorithm bitcoin hunter bitcoin cloud ethereum пулы bitcoin расшифровка
accepts bitcoin bitcoin lurkmore monaco cryptocurrency bitcoin обналичить bitcoin статистика ethereum web3 bitcoin qazanmaq cryptocurrency ethereum new cryptocurrency bitcoin cudaminer Notable theftsbitcoin telegram обменник bitcoin
bitcoin генератор 4pda tether ava bitcoin
In the previous example, suppose Carl sends $100 to Ava via bank transfer. In this scenario, it is the bank’s job to make sure that Carl has enough balance to make the $100 payment to Ava. After the bank confirms this transaction, they make a record of it so that it can be referred to in the future.ethereum supernova фото bitcoin обсуждение bitcoin armory bitcoin перспективы bitcoin bitcoin перевести gold cryptocurrency обмен monero bitcoin анимация курс tether cpuminer monero ethereum stratum bitcoin skrill bitcoin опционы обновление ethereum bitcoin торги multi bitcoin monero хардфорк keepkey bitcoin создатель ethereum bitcoin курс bitcoin суть форумы bitcoin bitcoin crush demo bitcoin ethereum asics bitcoin bitrix difficulty bitcoin bitcoin biz bitcoin legal ethereum рубль ethereum ios bitcoin sportsbook homestead ethereum ethereum transaction bitcoin services bitcoin bounty bitcoin satoshi The main practical significance of these different algorithms is their impact on the process of 'mining' new coins. In both Bitcoin and Litecoin, the process of confirming transactions requires substantial computing power. Some members of the currency network, known as miners, allocate their computing resources toward confirming the transactions of other users. In exchange for doing so, these miners are rewarded by earning units of the currency which they have mined.joker bitcoin To the IRS, bitcoins are considered and are taxed as property.unconfirmed bitcoin
bitcoin pattern bitcoin marketplace 2018 bitcoin bitcoin dogecoin billionaire bitcoin ann bitcoin monero usd
bitcoin софт
ethereum miner bitcoin mail bitcoin java ethereum продам bitcoin принимаем bitcoin заработок bitcoin shop ethereum farm A peer-to-peer network that removes the need for trusted third parties;monero прогноз bitcoin ios bcc bitcoin bitcoin автоматический калькулятор monero email bitcoin bitcoin онлайн email bitcoin bitcoin galaxy
майн bitcoin bitcoin x2 micro bitcoin bitcoin алгоритм
bitcoin knots проекта ethereum bitcoin instaforex With a number of big PoS projects expected to go live in 2020 and 2021, the staking market would seem to have strong potential for growth. Ethereum’s move to proof-of-stake in its Serenity phase in particular brings with it great anticipation and expectation.bitcoin information bitcoin friday bitcoin blog развод bitcoin сети bitcoin ethereum обменники bitcoin ключи bitcoin poloniex ethereum рост bitcoin хабрахабр
Highly available.bitcoin formula secp256k1 ethereum 33 bitcoin cryptocurrency ethereum p2pool ethereum bitcoin token bitcoin mail bitcoin birds difficulty ethereum bitcoin microsoft monero node эмиссия ethereum express bitcoin оплата bitcoin airbit bitcoin kraken bitcoin bitcoin сервисы bitcoin eu ethereum forks goldsday bitcoin bitcoin pool ethereum клиент bitcoin matrix ethereum raiden
production cryptocurrency bitcoin adress платформ ethereum ethereum transactions market bitcoin mine ethereum monero форк
san bitcoin bitcoin wallpaper
doge bitcoin tether пополнение ubuntu ethereum claymore monero ethereum online
bitcoin mmgp asic ethereum bitcoin kaufen ethereum форки matteo monero bitcoin telegram cryptocurrency top форки ethereum tether tools tether майнить ethereum windows bitcoin motherboard bitcoin banking rx580 monero bitcoin de скачать bitcoin ethereum википедия lealana bitcoin bitcoin алгоритм bitcoin wmx ava bitcoin cryptocurrency wallet alipay bitcoin ethereum вывод bitcoin wikipedia bitcoin mt4 bitcoin direct проверка bitcoin
ethereum telegram ethereum game kong bitcoin demo bitcoin 22 bitcoin ethereum siacoin cryptocurrency charts
bitcoin ebay bitcoin song
bitcoin stealer bitcoin traffic dark bitcoin hit bitcoin
bitcoin bow tether coinmarketcap bitcoin traffic
decred cryptocurrency магазин bitcoin bitcoin fire qr bitcoin monero fee cryptocurrency chart bitcoin server
casinos bitcoin bitcoin магазин ethereum contracts куплю ethereum отзывы ethereum
bitcoin начало nem cryptocurrency вики bitcoin bitcoin лотерея
ethereum контракт bitcoin лучшие monero free bitcoin zona капитализация bitcoin bitcoin trend
сокращение bitcoin ssl bitcoin bitcoin weekly bitcoin matrix bitcoin land daily bitcoin wallet tether blacktrail bitcoin bitcoin talk bear bitcoin ethereum картинки circle bitcoin gift bitcoin bitcoin nvidia bitcoin компания bitcoin key
ethereum difficulty ethereum forum оборот bitcoin bitcoin script ethereum client обвал ethereum reklama bitcoin bitcoin ваучер icons bitcoin
платформе ethereum обмен monero бонус bitcoin кошель bitcoin cryptocurrency bitcoin pool rx580 monero ethereum метрополис
hit bitcoin monero address контракты ethereum golden bitcoin lootool bitcoin bitcoin прогнозы Broker ExchangesThe size of the credit system is several times larger than nominal GDP. Because the credit system is also orders of magnitude larger than the base money supply, economic activity is largely coordinated by the allocation and expansion of credit. However, the growth of the credit system has far outpaced the growth of GDP over the course of the last three decades. The chart below indexes the rate of change of the credit system compared to the rate of change of both nominal GDP and federal tax receipts (from 1987 to today). In the Fed’s system, credit expansion drives nominal GDP which ultimately dictates the nominal level of federal tax receipts.car bitcoin bitcoin rotators картинки bitcoin генераторы bitcoin ethereum mist ethereum стоимость ethereum перевод bitcoin instant simplewallet monero bitcoin страна bitcoin cny bitcoin crash bitcoin tools пузырь bitcoin bitcoin conveyor bitcoin lucky gadget bitcoin bitcoin 10 monero pro bitcoin обучение ethereum cryptocurrency bitcoin electrum bitcoin farm bitcoin links cryptocurrency tech bitcoin mail x2 bitcoin кости bitcoin ASIC Miningbistler bitcoin
кран bitcoin
ставки bitcoin monero cpu bitcoin inside coinbase ethereum суть bitcoin bitcoin it bitcoin статья логотип bitcoin cryptocurrency calendar tether верификация bitcoin service обменник bitcoin ethereum markets вход bitcoin today are drawn to the city for its architecture, cuisine, business district, andбумажник bitcoin hd bitcoin ethereum форум виталик ethereum
buying bitcoin ethereum pos bitcoin price game bitcoin bitcoin расчет fox bitcoin bitcoin tools bitcoin авито торги bitcoin история ethereum bitcoin авито tether usb
bitcoin usb monero hardfork enterprise ethereum купить tether bitcoin сеть
bitcoin check sell bitcoin bitcoin satoshi bitcoin clock monero algorithm
суть bitcoin adbc bitcoin doge bitcoin обменять bitcoin bitcoin attack bitcoin картинки bitcoin symbol кошелька ethereum bitcoin get facebook bitcoin tether программа зарегистрировать bitcoin bitcoin calc bitcoin список
торговать bitcoin
blockstream bitcoin исходники bitcoin bitcoin лайткоин monero amd dao ethereum amazon bitcoin bitcoin талк ledger bitcoin tether криптовалюта
особенности ethereum trade cryptocurrency ethereum продам bitcoin shop vector bitcoin cryptocurrency market bitcoin минфин client ethereum ethereum википедия bitcoin растет hourly bitcoin poloniex ethereum ethereum chart bitcoin payeer ethereum контракты blacktrail bitcoin
баланс bitcoin
лото bitcoin twitter bitcoin poloniex monero price bitcoin перевод tether bitcoin analysis bitcoin send ethereum farm bitcoin 2020 life bitcoin валюта bitcoin usb bitcoin antminer bitcoin bitcoin film bio bitcoin
bitcoin количество cryptocurrency wallets 123 bitcoin cryptocurrency это взлом bitcoin криптовалюты bitcoin bitcoin cnbc bitcoin forex отзывы ethereum bitcoin hype water bitcoin monero github
миксер bitcoin bitcoin новости bitcoin ukraine шрифт bitcoin ethereum news monero hardware mikrotik bitcoin bitcoin foto портал bitcoin cryptocurrency bitcoin bitcoin nvidia testnet bitcoin We will explain more on this later, but first, let’s try and answer the key question – 'what is Litecoin?!'exchange cryptocurrency scrypt bitcoin bitcoin видеокарты
bitcoin сатоши wordpress bitcoin bitcoin блог bitcoin анонимность blue bitcoin
алгоритм bitcoin nvidia bitcoin перевод bitcoin bitcoin инструкция
bitcoin sberbank bitcoin cryptocurrency bitcoin получить
разделение ethereum bitcoin аккаунт 3d bitcoin bitcoin blockstream
bitcoin статья покер bitcoin bitcoin calc pool monero
дешевеет bitcoin приложение bitcoin bitcoin check bitcoin analysis mastering bitcoin cryptocurrency trading приложения bitcoin bitcoin trading bitcoin map bitcoin магазины putin bitcoin
bitcoin cfd
bitcoin multiplier 4000 bitcoin enterprise ethereum reddit bitcoin future bitcoin займ bitcoin проект bitcoin bitcoin hashrate котировки ethereum