The Corona epidemic taught us many lessons about a number of aspects of life, and one of the most important of these aspects is saving and investment. Those who made wise and calculated financial decisions were the ones who relentlessly let go of their past lifestyle during the difficult phases of lockdown.
What we have seen during the pandemic is that people have moved towards safe haven assets. Where investments in gold achieved good returns. But the luster of the yellow metal was not strong enough to face the meteoric rise of Bitcoin, which achieved better returns than gold. Which is why cryptocurrency is the new hot cake in terms of investment.
Earlier, the traditional move was to hedge stock volatility with gold. It was a very effective method in the past, but a new alternative has emerged that challenges the old school safe haven method.
What are the pros of gold?
The yellow metal is valuable as a material for consumer goods such as jewelry, and it is not found in abundance, meaning it has a scarcity factor. Regardless of demand, supply remains disproportionately low to demand.
Remember that gold cannot be synthesized. A company can issue new shares, and the Fed can print dollar bills, but there is no such case with gold. Rather, it is necessary to mine, excavate, and excavate the earth in order to extract and process bitcoins.
What are the advantages of Bitcoin digital currency?
Bitcoin is a blockchain-based cryptocurrency that shares some characteristics with gold. In fact, many have called bitcoin "digital gold" in the past due to its poor relationship with all other assets, especially stocks. Like gold, there is a finite amount of bitcoin, with only 21 million coins, 18.7 million bitcoins have already been mined.
Comparison of gold and cryptocurrency
On the basis of legality, transparency, and security, gold ranks higher than cryptocurrencies.
-In terms of rarity, both are rare.
-In terms of liquidity, both are good.
-Speaking of volatility, Bitcoin is more volatile compared to gold.
-The yellow metal has a long history of being less volatile compared to cryptocurrencies.
-Gold has unparalleled accessibility for people of all economic and knowledge levels.
-More importantly, gold is the ultimate currency for central banks.
Should you invest in gold or bitcoin?
As we move towards a cashless society and cryptocurrencies become more prevalent than ever, it makes sense to consider whether a new asset class like bitcoin is worth investing in.
Commenting on this, Mr. Riccardo Pena, CEO of The Modest Wallet:
"I personally prefer to use Bitcoin instead of gold in my wallet because Bitcoin is really decentralized, there is a limited supply and I can use Bitcoin to transact with anyone from anywhere in the world".