When it comes to investing, there are many options to consider when you're checking out the stock market. One of the most popular choices among seasoned and institutional investors is gold, which has been a staple of portfolios for centuries. It's the OG when it comes to the store of value, and it has a rich history dating back to the days of the pharaohs of Egypt.
However, in recent years, another option has emerged: Bitcoin. which is the 800-pound gorilla that's shaken the world.
While both gold and Bitcoin have their own unique characteristics and benefits, many investors are starting to question whether Bitcoin is actually a better investment than gold.
Traditional Gold Investor
First, let's take a look at the characteristics of a traditional gold investor.
These investors tend to prioritize safety and stability, and often view gold as a hedge against inflation in times of economic uncertainty.
They also value the physicality of gold and the ability to hold it in their possession.
On the other hand, a Bitcoin investor is often seen as more tech-savvy and is attracted to the potential for high returns and the decentralized nature of cryptocurrencies.
They are more open to taking on risks and are more comfortable with the digital nature of Bitcoin.
New Age Bitcoin Investor
Now let's take a look at the benefits of investing in Bitcoin over gold from the perspective of each type of investor.
From the traditional gold investor's perspective, one of the main benefits of investing in Bitcoin is the potential for higher returns.
While gold has been a solid investment in the past, its returns have been relatively modest compared to those of Bitcoin.
In previous years, the price of Bitcoin has increased by over 500%, while gold has only risen by around 20%.
It's important to note that we're in a crypto bear market with prices down some 70%-90% for a lot of crypto projects.
In fact, as of the date of this writing, we've already reached the bottom of the bear market, and Bitcoin is near $23K as of this writing.
Additionally, Bitcoin is not subject to the same supply constraints as gold, meaning that there is the potential for even greater gains in the future.
Another benefit for traditional gold investors is the increased accessibility of Bitcoin. Unlike gold, which requires the physical purchase and storage of coins or bars, Bitcoin can be easily bought and sold through online exchanges. This makes it more convenient for investors to add to or liquidate their positions.
Furthermore, Bitcoin's decentralized nature makes it more resistant to market manipulation and government intervention mostly. Because the asset class is still in its infancy, there isn't as much liquidity as in the gold market, so price manipulation still occurs for Bitcoin when you have Whales that can move the market.
From the perspective of the more tech-savvy Bitcoin investor, one of the main benefits of Bitcoin over gold is its potential for greater utility. While gold is primarily used as a store of value, Bitcoin has the potential to be used as a medium of exchange and as a way to transfer value, along with being a store of value.
This is due to its underlying blockchain technology, which allows for fast and secure transactions without the need for a central intermediary.
Bitcoin is also programmable, meaning that it can be used to create new applications and financial instruments with its lightning network.
Another benefit for Bitcoin investors is its ability to act as a hedge against inflation. Bitcoin's fixed supply cap of 21 million tokens, and its decentralized nature, make it less susceptible to inflationary pressures. This is because central banks cannot print more bitcoins as they do with fiat currencies. Additionally, Bitcoin's decentralized nature also makes it less susceptible to government intervention, which can lead to inflation. Bitcoin follows a strict four-year cycle known as the halving, where the bitcoin rewards for miners are reduced in half.
Bitcoin Vs Gold
Both gold and Bitcoin have their own unique characteristics and benefits. However, for investors who are looking for higher returns, increased accessibility, and greater utility, Bitcoin is the better option.
Its decentralized nature and fixed supply cap make it a hedge against inflation and government intervention in my opinion and make it a more attractive investment than gold.
You can attribute the birth of smart contracts, NFTs, DeFi, and web 3.0 to Bitcoin. It's the father of crypto, and no other altcoin would exist if it wasn't for BTC.
While Gold has a market valuation of just over $12 trillion, versus Cryptocurrency's $1 trillion, crypto is here to stay and will be the 12th sector of the S&P in time.
Bitcoin is better
Matt is the founder of TechMalak. When he's not buried face-deep in the crypto charts you can find him tinkering with the latest tech gadgets and A. I tools. He's a crypto investor and entrepreneur. He uses a mixture of A.I and human thought and input into all his articles on TechMalak, further merging man with machine.
