Bitcoin vs. Gold: Which Investment Option is Better?
Bitcoin has been referred to as “digital gold.” It’s a blockchain-based cryptocurrency that’s used to buy services and products online.
Bitcoin was created in 2007, and its price skyrocketed in 2017, reaching thousands of dollars’ worth for just one bitcoin. Bitcoins can be obtained by buying them with real cash, by selling something against the value of bitcoins, or by mining them using powerful computers. However, mining them is getting increasingly difficult.
Why do people buy bitcoins?
Many people prefer keeping their transactions private, and bitcoin offers them the anonymity they need. While each transaction is recorded in the blockchain, every individual has ananonymous key that encrypts the transaction.
Moreover, the value of bitcoin is also not controlled by governments or banks, instead being wholly dependent upon its utility with regard to exchanging goods and services.
Why do people invest in gold?
Gold has historically been one of the safest investment options out there. While the S&P 500 index went down by 37% during the Great Recession of 2007-2009, the price of gold actually went up by 24% during this time period.
Physical gold provides protection in times of crisis, especially against inflation and counterparty risk. Gold remains almost entirely unaffected by huge fluctuations in currency value.
The biggest issue investors face after buying gold is storage. On the other hand,cryptocurrencies like bitcoin require no storage. Many investors don’t trust banks to store their gold in safe vaults, either. And keeping gold on one’s person or inside one’s home may also be dangerous.
We offer secure gold and silver storage to all of our investors, and our buyback commitment ensures safe investment.
The value of bitcoins is set by their utility and is influenced by:
- Bitcoin supply and demand
- The price of mining a bitcoin
- The amount and value of competing cryptocurrencies
- Rewards obtained by bitcoin miners
- Local and international regulations that govern their sale
- The exchanges it trades on
In contrast, the value of gold is set almost entirely due to its demand and supply—and since gold is the third most consistently bought investment commodity globally, demand is always present.
Even if it doesn’t rise in value, it’s an important asset since its value remains static. The supply of gold is always disproportionately low compared to demand—unlike paper currency, which is created by banks, or cryptocurrency, which is created by companies and coders, gold has to be dug up and processed. It’s a physical asset that offers security like no other.
We’re a precious metals investment company that cares about the financial security and well-being of our American gold and silver investors. At Orion Metal Exchange, we offer secure gold and silver storage to all our investors. Contact us today to learn more about our services.