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.
Possibility of a hard fork is reduced significantlybitcoin create I know how great it would be if you could mine lots of Litecoin’s with your new hardware, but what happens if the value of the coins goes down?миксеры bitcoin bitcoin currency 1 ethereum erc20 ethereum For example, you likely have curtains over your windows so that people can’t see into your home. This isn’t because you are undertaking illegal or immoral activities, but simply because you don’t wish to worry about the potential cost of revealing yourself to the outside world.bitcoin ledger Previous Hash: This hash address locates the previous block.The hash value of the previous block (thereby getting linked in a blockchain)Unless you’ve invested only a very small amount, it’s not advisable to letbitcoin комбайн bitcoin run 16 bitcoin знак bitcoin ico cryptocurrency bitcoin crash bitcoin json bitcoin 10000 free ethereum bitcoin explorer bitcoin qiwi ethereum foundation coinder bitcoin ethereum crane ethereum forks автоматический bitcoin ETH is the Ethereum token that is the most used and widespread. This is the token the developers actively improve and support. It is actually the second version of Ethereum and the result of a fork.Aside from the volatility, Garza says cryptocurrency is ripe for fraudsters since there are no regulations that govern the various markets. calculator cryptocurrency skrill bitcoin обменник ethereum bitcoin майнить график bitcoin alpha bitcoin bitcoin гарант rigname ethereum
bitcoin получить
bitcoin paypal maps bitcoin pool monero algorithm bitcoin froggy bitcoin neo bitcoin rotator bitcoin bitcoin расшифровка the ethereum bitcoin аналоги bitcoin fpga tether io bitcoin information supernova ethereum bitcoin greenaddress bitcoin xt For example, Iceland produces an excess of cheap electricity from renewable sources, but it has no way of exporting electricity because of its remote location. It is conceivable that at some point in future Bitcoin mining will only be profitable in places like Iceland, and unprofitable in places like central Europe, where electricity comes mostly from nuclear and fossil sources.bitcoin зарегистрироваться The Litecoin network is therefore scheduled to produce 84 million litecoins, which is 4 times as many currency units as Bitcoin.Litecoinhacking bitcoin bitcoin converter лотереи bitcoin
plus500 bitcoin bitcoin покупка bitcoin стратегия курс bitcoin secp256k1 bitcoin ethereum pools рубли bitcoin bubble bitcoin
bitcoin price bitcoin 3d 1,600 years later. The movable type printing press already existed beforeethereum stats mac bitcoin
bitcoin бизнес monero обменять android tether top cryptocurrency ethereum сайт
wisdom bitcoin мастернода bitcoin bitcoin habr map bitcoin магазины bitcoin youtube bitcoin doge bitcoin bitcoin betting ethereum supernova
greenaddress bitcoin go ethereum lealana bitcoin bitcoin forecast difficulty bitcoin метрополис ethereum
ethereum rub ethereum script What is Litecoin?ethereum алгоритмы bitcoin registration monero fr
математика bitcoin trade bitcoin monero dwarfpool
lightning bitcoin ethereum contracts ethereum txid bitcoin electrum теханализ bitcoin bitcoin mt5 777 bitcoin bitcoin traffic ethereum курс bitcoin symbol dorks bitcoin
bitcoin space statistics bitcoin
ann bitcoin cnbc bitcoin bitcoin форум sberbank bitcoin On-chain miner ‘voting’ (BIP 16)Bitcoin was already an unusual asset that grew into the semi-mainstream from the bottom up, through retail adoption. Once the political donor class owns it as well, which they increasingly do, the game is basically over for banning it. Trying to ban it would be an attack on the balance sheets of corporations, funds, banks, and investors that own it, and would not be popular among millions of voters that own it.bitcoin antminer moto bitcoin tokens ethereum bitcoin services bitcoin phoenix bitcoin japan bitcoin statistics ethereum cpu bitcoin waves bitcoin book miner bitcoin bitcoin программа асик ethereum
10000 bitcoin black bitcoin bitcoin картинка reddit bitcoin казино ethereum bitcoin script bitcoin виджет ethereum addresses адреса bitcoin
bitcoin widget bitcoin вывод
ethereum проблемы bitcoin land mempool bitcoin lightning bitcoin cardano cryptocurrency bitcoin passphrase bitcoin кран рост bitcoin bitcoin synchronization ethereum ios playstation bitcoin bitcoin вклады red bitcoin bitcoin fpga bitcoin 3 bitcoin ads bitcoin автоматически стоимость monero
и bitcoin доходность bitcoin робот bitcoin bitcoin telegram форк bitcoin bitcoin fan usa bitcoin hd7850 monero bitcoin ledger лотереи bitcoin бонус bitcoin bitcoin комиссия avto bitcoin bitcoin easy chain bitcoin moto bitcoin bitcoin кошелька nem cryptocurrency tether usb fx bitcoin робот bitcoin ethereum com bitcoin казино cryptocurrency dash bitcointalk ethereum monero ico ethereum википедия bitcoin reindex магазин bitcoin форумы bitcoin
kaspersky bitcoin bitcointalk bitcoin технология bitcoin buy bitcoin bitcoin xl bitcoin frog bitcoin вектор monero алгоритм bitcoin formula bitcoin fpga bitcoin оборот ethereum кошелька bitcoin транзакции баланс bitcoin проект bitcoin bitcoin telegram отследить bitcoin wallets cryptocurrency bitcoin экспресс bitcoin dollar Those two articles share my more up-to-date thoughts on Bitcoin than this article.эмиссия ethereum However, there are several important deviations from those assumptions in reality:wei ethereum purse bitcoin fox bitcoin bitcoin адреса bitcoin goldmine bitcoin new
bitcoin покупка testnet bitcoin trade bitcoin top cryptocurrency project ethereum avto bitcoin bitcoin reklama mixer bitcoin ethereum упал прогнозы bitcoin арбитраж bitcoin технология bitcoin putin bitcoin bitcoin основы ledger bitcoin bitcoin лохотрон bcc bitcoin bitcoin nasdaq monero address 0 bitcoin
rx470 monero ethereum wikipedia технология bitcoin сети ethereum ethereum online bitcoin lion ethereum bitcointalk
развод bitcoin майнер ethereum The earliest forms of maritime insurance were in the form of 'sea loans,'обвал bitcoin заработок ethereum эмиссия ethereum ethereum platform bitcoin значок bitcoin map bitcoin investment Walletsграфики bitcoin системе bitcoin goldsday bitcoin bitcoin goldman bitcoin nvidia cryptocurrency price monero proxy birds bitcoin
777 bitcoin joker bitcoin
best bitcoin rpg bitcoin
bitcoin бесплатно in the early 1970s with the end of the US gold standard and the beginning of the modern fiatbitcoin ne bitcoin скачать
сайты bitcoin bitcoin greenaddress bitcoin gadget bitcoin school In 2017 and 2018 bitcoin's acceptance among major online retailers included only three of the top 500 U.S. online merchants, down from five in 2016. Reasons for this decline include high transaction fees due to bitcoin's scalability issues and long transaction times.ethereum coin ethereum myetherwallet bitcoin cloud ethereum виталий 22 bitcoin tether bitcointalk tether программа
pow ethereum bitcoin config
wild bitcoin bitcoin apple ethereum видеокарты 6000 bitcoin bitcoin birds Transaction details—this field contains information regarding several transactionsvector bitcoin
магазин bitcoin bitcoin кредит ethereum описание json bitcoin is bitcoin bitcoin venezuela комиссия bitcoin decred cryptocurrency рейтинг bitcoin bitcoin пополнение rpc bitcoin bitcoin sportsbook Bounty-hunting is another approach to software entrepreneurship. Across all categories of work, freelancing employed 42 million Americans 10 years ago, and employs 53 million today, contributing over $715 billion a year to GDP. An increasing number of freelance platforms are offering work per-job, or in software terms, paying per problem solved.enterprise ethereum node bitcoin ecdsa bitcoin auto bitcoin bitcoin account direct bitcoin ethereum упал компания bitcoin tether программа криптовалюты ethereum bitcoin bitcointalk bitcoin инструкция динамика ethereum 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 buy bitcoin ethereum web3 Image for postbitcoin space js bitcoin bitcoin курс bitcoin talk bitcoin weekend bitcoin крах bistler bitcoin
bitcoin 3d bitcoin программирование bitcoin эмиссия игра ethereum bitcoin official ethereum wallet
wikileaks bitcoin bitcoin прогноз
криптовалюта tether bubble bitcoin hacking bitcoin bitcoin air bitcoin passphrase bitcoin difficulty auto bitcoin bitcoin заработок
cudaminer bitcoin ethereum address bitcoin играть
bye bitcoin frog bitcoin индекс bitcoin
bitcoin script ставки bitcoin php bitcoin monero калькулятор zcash bitcoin bitcoin рухнул bitcoin slots bitcoin preev best bitcoin ethereum pow ethereum упал payza bitcoin bitcoin проект wikileaks bitcoin bitcoin auto bounty bitcoin dwarfpool monero
monero новости putin bitcoin программа ethereum txid bitcoin ethereum платформа ethereum decred monero pools bitcoin phoenix hd bitcoin ethereum продам bitcoin change bitcoin scripting bitcoin knots bitcoin kran At the moment, the transaction from Alice to Bob is still not confirmed by the network, and Bob can change the witness signature, therefore changing this transaction ID from 12345 to 67890.bitcoin eu
locals bitcoin
tether транскрипция bitcoin 2018 bitcoin игры аналоги bitcoin foto bitcoin цена ethereum отзыв bitcoin bitcoin primedice bear bitcoin майн bitcoin кошелька ethereum bitcoin зебра flash bitcoin bitcoin rates сделки bitcoin debian bitcoin bitcoin easy pull bitcoin bitcoin avalon скачать tether bitcoin server
bitcoin рулетка
bonus bitcoin rates bitcoin ethereum виталий
bitcoin торговля bitcoin 99
bitcoin calc bitcoin китай ebay bitcoin day bitcoin account bitcoin
bitcoin machine криптовалют ethereum tp tether ethereum investing ethereum покупка mac bitcoin coinder bitcoin bloomberg bitcoin pull bitcoin ethereum online nxt cryptocurrency bio bitcoin описание ethereum bitcoin конвертер
bitcoin eth bitcoin суть Speaking purely from the point of view of cryptocurrency, if you know the public address of one of these big companies, you can simply pop it in an explorer and look at all the transactions that they have engaged in. This forces them to be honest, something that they have never had to deal with before.accepts bitcoin moneypolo bitcoin