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Recently exploding into the mainstream, cryptocurrencies such as bitcoin made quite a name for themselves, with many people hopping on board the cryptocurrency bandwagon for investment.

Many people saw bitcoin as a potential alternative to traditional investments. But if the volatile nature of digital currency and its unexpected rise and fall is anything to go by, cryptocurrency is not the long-term lucrative investment people think it to be.

In a battle of traditional investments such as precious metals IRA and cryptocurrency, which will far better? Let’s find out.

Cryptocurrency vs. Precious Metals: Value

In a traditional sense, the value of an object is directly based on its scarcity. The lesser amount is present of something, the more valued it is in the market. Moreover, value is also indicated based on a something’s usefulness. No matter how rare an object is, if it’s useless, it won’t be worth much. If it’s plentiful as well as useful, that too might not be worth a lot. So, what exactly determines an item’s value?

While cryptocurrencies, such as Ethereum, are generally infinite, meaning that there isn’t an exact limit to how much of it can be mined. However, bitcoin is a finite coin. Precious metals are finite as well. There’s only so much that can be physically mined before there is none left to be mined. So, it will continue to increase in value.

Cryptocurrency vs. Precious Metals: Investment Risk

Investing in anything will naturally involve you taking some amount of risk. Nothing is set in stone and everything is subject to change; so, what matters is making an investment that will have lesser risks involved. Investing in precious metals and cryptocurrency is no different. However, the level of risk involved is vastly different.

Cryptocurrency, such as bitcoin, is intensely volatile. Something that you purchased for $5000 can be reduced to $500 the next day, making your entire investment worthless. This is why precious metals are considered a more secure long-term investment. When you buy gold or silver, they are your physical property and will remain valuable, bar a steep drop in value out of the blue, which is unlikely.

Gold Coins

Cryptocurrency vs. Precious Metals: Security Risk

A couple of years back, Bitcoin was involved in a dramatic heist known as Bitfinex, where hackers made off with $70 million in cryptocurrency. Hackers were able to infiltrate a secure system and this was only the second-largest heist in bitcoin’s history. Cryptocurrency has a longstanding history of hacks and cyber heists which makes long-term investment dubitable for investors.

Precious metals on the other hand are considered to grow in value over time with fewer security risks and market instability. They can stored in secure vaults, reducing chances of robberies.


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