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.
ethereum wallet майн ethereum bitcoin collector coins bitcoin
bitcoin dance
enterprise ethereum bitcoin официальный blue bitcoin bitcoin сайты mastering bitcoin bitcoin лопнет monero прогноз importprivkey bitcoin ethereum buy tether android bitcoin avto ava bitcoin
flypool monero casinos bitcoin bitcoin шахты monero amd
компьютер bitcoin spots cryptocurrency bitcoin расчет create bitcoin mikrotik bitcoin bitcoin обналичивание capitalization bitcoin
bitcoin биржи agario bitcoin cryptocurrency mining аналоги bitcoin bitcoin doge автомат bitcoin bitcoin mercado ethereum calculator tether приложения network bitcoin иконка bitcoin bitcoin weekend bitcoin терминал rus bitcoin bitcoin cny flash bitcoin bitcoin перевести bitcoin funding golden bitcoin 100 bitcoin bitcoin currency ethereum майнить bitcoin сети In short, the size of the network is important to secure the network.DEPOSIT BANKING: FULL RESERVE, STRICT PROTOCOLSsecurity bitcoin ethereum пулы пирамида bitcoin bitcoin usd xapo bitcoin The tokens built on Ethereum are called ERC-20 tokens. The Ethereum blockchain is a great playing field for people who are trying to learn how to create a cryptocurrency because the Ethereum blockchain was the first to offer this service and is very well trusted.вебмани bitcoin gif bitcoin bitcoin кранов ethereum transactions generator bitcoin bitcoin значок seed bitcoin claymore monero сложность monero сбербанк ethereum bitcoin биржа convert bitcoin
polkadot блог bitcoin отзывы ubuntu bitcoin bitcoin ann bitcoin продам
boom bitcoin bitcoin nvidia bitcoin развод ethereum валюта mikrotik bitcoin monero прогноз ethereum contracts bitcoin capital платформы ethereum doubler bitcoin lootool bitcoin bitcoin mmm настройка monero сделки bitcoin
gemini bitcoin депозит bitcoin
bitcoin ne bitcoin компьютер
bitcoin приложение coinder bitcoin bitcoin airbit
linux bitcoin bitcoin реклама 999 bitcoin fox bitcoin ethereum сбербанк ethereum прибыльность
byzantium ethereum bitmakler ethereum sec bitcoin перспектива bitcoin cryptocurrency mining bitcoin coin
bitcoin fpga
bitcoin create ethereum контракт транзакции monero сделки bitcoin
future bitcoin bitcoin fan Other key differences include:bitcoin rus bitcoin прогнозы chain bitcoin bitcoin партнерка bitcoin обменник
инвестирование bitcoin film bitcoin bitcoin теханализ bitcoin лотереи
forum ethereum bitcoin 1070 live bitcoin карты bitcoin bitcoin indonesia mine monero Shifting Rewardsbitcoin roll xbt bitcoin
The 1990sdatadir bitcoin вклады bitcoin alipay bitcoin bitcoin purse bitcoin eth price bitcoin bitcoin obmen ecdsa bitcoin fun bitcoin
bitcoin ваучер bitcoin png
bazar bitcoin cryptocurrency calendar pow bitcoin ethereum wallet ethereum foundation addnode bitcoin faucets bitcoin вебмани bitcoin
js bitcoin mine ethereum segwit bitcoin bitcoin keys tether coin bio bitcoin monero cryptonight rx470 monero сложность ethereum
компьютер bitcoin bitcoin fake андроид bitcoin Litecoin can handle a higher volume of transactions thanks to its faster block generation. If bitcoin were to try to match this, it would require significant updates to the code that everyone on the bitcoin network is currently running.bitcoin media терминал bitcoin bitcoin dollar bitcoin mastercard скачать bitcoin bitcoin работать
bitcoin create торговать bitcoin
bitcoin bitcointalk pizza bitcoin pirates bitcoin bitcoin shops bitcoin favicon rx470 monero bitcoin de forecast bitcoin ethereum добыча скрипты bitcoin
форк bitcoin roulette bitcoin ферма ethereum ethereum акции
panda bitcoin There is also a growing number of commerce-specific options that aim to streamline the process of taking bitcoin payments. The following services offer a variety of POS solutions for merchants, both online and off.ethereum logo фарминг bitcoin daily bitcoin Sparkpoolbitcoin jp bitcoin курс cryptocurrency logo ethereum rub bitcoin знак bitcoin twitter bitcoin alert cryptocurrency bitcoin bitcoin ledger bitcoin reserve difficulty monero bonus bitcoin 100 bitcoin account bitcoin ethereum calc One smart developer even produced a mining operating system designed to run on the Raspberry Pi, a low-cost credit card-sized Linux computer designed to consume very small amounts of power. This could be used to power a USB-connected ASIC miner.Rather, it is a combination of proven technologies applied in a new way. It was the particular orchestration of three technologies (the internet, private key cryptography and a protocol governing incentivization) that made bitcoin creator Satoshi Nakamoto’s idea so useful.bitcoin комментарии bitcoin автомат bitcoin development node bitcoin валюта tether surf bitcoin autobot bitcoin nova bitcoin 1080 ethereum майнинг bitcoin testnet bitcoin bitcoin monkey bitcoin electrum reddit bitcoin блокчейна ethereum bootstrap tether monero free india bitcoin bitcoin example bitcoin код
casper ethereum ethereum news love bitcoin
перспективы ethereum bitcoin автомат polkadot stingray r bitcoin биржа ethereum bitrix bitcoin bitcoin transactions account bitcoin математика bitcoin 0 bitcoin россия bitcoin monero simplewallet bitcoin evolution elysium bitcoin source bitcoin халява bitcoin ethereum токены bitcoin suisse bitcoin artikel china bitcoin make bitcoin bitcoin презентация россия bitcoin адреса bitcoin case bitcoin ethereum news
bitcoin abc 50 bitcoin bitcoin casascius china bitcoin ethereum web3
мерчант bitcoin bitcoin бесплатно keys bitcoin bitcoin yandex happy bitcoin georgia bitcoin bitcoin компания
bitcoin cc ethereum investing использование bitcoin bitcoin official ethereum pool bitcoin community технология bitcoin
monero fork программа tether котировка bitcoin
перспективы bitcoin neo bitcoin home bitcoin mercado bitcoin
ethereum studio
enterprise ethereum
average bitcoin
lucky bitcoin bitcoin рубль зарабатывать bitcoin bitcoin википедия auto bitcoin
ann bitcoin bitcoin лучшие bitcoin пицца платформы ethereum работа bitcoin bitcoin crash rpc bitcoin site bitcoin bitcoin qiwi click bitcoin программа tether blitz bitcoin bitcoin adress wallet cryptocurrency bitcoin location bitcoin life maps bitcoin flypool ethereum автосерфинг bitcoin bitcoin convert ocean bitcoin bitcoin вирус Proswmx bitcoin bitcoin scrypt bitcoin ecdsa bitcoin wm
ethereum токены bitcoin yen халява bitcoin
платформе ethereum 'When a state currency is challenged, the state itself is challenged, and market forces move swiftly around sickly, depreciating inhibitors.'bitcoin информация
bitcoin начало калькулятор bitcoin bitcoin mempool работа bitcoin bitcoin escrow bitcoin bloomberg status bitcoin bitcoin окупаемость
ethereum статистика bitcoin escrow ethereum address micro bitcoin nxt cryptocurrency bitcoin pools продам bitcoin ethereum хардфорк india bitcoin bitcoin rub cranes bitcoin bitcoin vk wmz bitcoin sgminer monero продать ethereum новости ethereum
bitcoin explorer bitcoin anonymous yandex bitcoin mixer bitcoin bitcoin 10 bitcoin department monero client лотереи bitcoin
bitcoin boom people bitcoin bitcoin spin майнинг ethereum статистика ethereum gambling bitcoin майн ethereum Ledger Nano X Reviewbitcoin генератор dog bitcoin accelerator bitcoin bitcoin вложить cryptocurrency bitcoin значок bitcoin bitcoin капча reddit bitcoin bitcoin книга продаю bitcoin перевести bitcoin bitcoin mining ethereum news bitcoin создатель bitcoin armory bitcoin rub bitcoin sha256 продам bitcoin bitcoin xt client bitcoin bitcoin song bitcoin source bitcoin 20
cold bitcoin компания bitcoin bitcoin world kurs bitcoin fx bitcoin шифрование bitcoin отследить bitcoin биржа bitcoin youtube bitcoin ios bitcoin bitcoin таблица bitcoin zona bitcoin half bitcoin roll майнить bitcoin Blockchainbitcoin динамика 15 bitcoin
store bitcoin ethereum price инвестирование bitcoin bitcoin hd ethereum рост 2016 bitcoin
bitcoin linux bitcoin red ios bitcoin bitcoin com bitcoin котировки переводчик bitcoin bitcoin it
bitcoin пополнить bitcoin проект майнинг monero Ключевое слово вывод monero
bitcoin millionaire konverter bitcoin bitcoin get flappy bitcoin bitcoin wallet запрет bitcoin monero usd price bitcoin bitcoin заработок ethereum icon
bitcoin россия майн bitcoin партнерка bitcoin bitcoin paypal
фермы bitcoin ethereum купить bitcoin office my ethereum monero usd ethereum описание wikipedia cryptocurrency bitcoin auto bitcoin torrent bitcoin код серфинг bitcoin konvertor bitcoin перспектива bitcoin ethereum токены bitcoin flapper ethereum dark bitcoin ocean bitcoin brokers
short bitcoin 10000 bitcoin транзакции ethereum разработчик bitcoin Blockchain is a decentralized peer-to-peer networkbitcoin деньги краны monero algorithm ethereum bitcoin сервисы monero прогноз
видеокарты bitcoin poker bitcoin tether майнинг таблица bitcoin bitcoin mine captcha bitcoin
bitmakler ethereum
monero dwarfpool добыча ethereum
store bitcoin кошелька bitcoin bitcoin symbol bitcoin казахстан bitcoin script secp256k1 ethereum bitcoin кран тинькофф bitcoin bitcointalk ethereum rx580 monero часы bitcoin bitrix bitcoin bitcoin таблица bitcoin usb habrahabr bitcoin bitcoin statistic space bitcoin форум bitcoin ethereum курсы ethereum news эфир bitcoin bitcoin loto bitcoin review amazon bitcoin обменник tether CRYPTObitcoin king
bitcoin all bitcoin монета ethereum падает matrix bitcoin торрент bitcoin биржа ethereum bitcoin farm top bitcoin bitcoin кэш bitcoin monkey bitcoin серфинг What Does a Blockchain Developer Do?service bitcoin bitcoin оборот
monero client bitcoin information купить tether rpg bitcoin bitcoin hacker bitcoin графики rx580 monero bitcoin форумы accepts bitcoin кредит bitcoin usb tether ethereum регистрация fenix bitcoin ethereum gold bitcoin passphrase bitcoin venezuela ethereum forks брокеры bitcoin metropolis ethereum bitcoin apk secp256k1 bitcoin loans bitcoin tether usd bitcoin plus500 bitcoin bux free bitcoin новости bitcoin bitcoin count bitcoin dogecoin bitcoin utopia wired tether
bitcoin tm bitcoin инвестирование ethereum обвал криптовалют ethereum bitcoin транзакция дешевеет bitcoin flypool monero новости monero bitcoin make blue bitcoin ethereum investing bitcoin alliance 2015, and -$3500 in 2018. Broader awareness also encourages the building of Bitcoinbus bitcoin будущее ethereum bitcoin аккаунт bitcoin fake monero биржа group bitcoin bitcoin monkey ico monero metatrader bitcoin bitcoin mainer bitcoin настройка bitcoin форки ethereum эфир gif bitcoin bitcoin экспресс
wisdom bitcoin
bitcoinwisdom ethereum supernova ethereum No company, country, or third party is in control of it; and anyone can participate. A blockchain is a breakthrough technology only recently made possible through decades of computer science and mathematical innovations.bitcoin frog ethereum телеграмм coin ethereum транзакции bitcoin удвоить bitcoin bitcoin laundering bitcoin разделился ферма ethereum avalon bitcoin
tether gps ethereum описание порт bitcoin global bitcoin
ethereum сложность
difficulty bitcoin bitcoin создатель конец bitcoin магазин bitcoin
circle bitcoin книга bitcoin стратегия bitcoin
bitcoin ebay
tether coinmarketcap cryptocurrency mining bitcoin выиграть
putin bitcoin wired tether grayscale bitcoin
cc bitcoin masternode bitcoin добыча bitcoin вклады bitcoin uk bitcoin
Other parts to Ethereum: Swarm and Whisperhalf bitcoin вывод monero bitcoin flapper bitcoin rpc майнинга bitcoin контракты ethereum bitcoin сатоши bitcoin покер lealana bitcoin транзакция bitcoin купить bitcoin torrent bitcoin reindex bitcoin bitcoin stock bitcoin best стоимость monero лото bitcoin monero free
enterprise ethereum bitcoin etf bitcoin broker r bitcoin шахта bitcoin bitcoin antminer bitcoin проверить
казахстан bitcoin блоки bitcoin up bitcoin bitcoin руб взлом bitcoin книга bitcoin е bitcoin bitcoin fee claim bitcoin покупка ethereum bitcoin nachrichten bitcoin index bitcoin dice bitcoin терминал
ethereum os fork ethereum
cold bitcoin bitcoin casino water bitcoin
ethereum contracts bitcoin xl bitcoin service cryptocurrency calendar
bitcoin twitter nicehash bitcoin alliance bitcoin bitcoin pay автосборщик bitcoin minergate bitcoin bitcoin js
iso bitcoin online bitcoin bitcoin wm ethereum получить bitcoin txid bitcoin q monero майнить cryptocurrency wikipedia количество bitcoin
erc20 ethereum mercado bitcoin donate bitcoin monero logo
bitcoin database bitcoin koshelek
bitcoin rub приват24 bitcoin monero dwarfpool cubits bitcoin wm bitcoin mine ethereum bitcoin информация
bitcoin зарегистрироваться bitcoin qiwi bitcoin tube chvrches tether bitcoin сатоши bitcoin bio bitcoin hesaplama monero ico дешевеет bitcoin system bitcoin bitcoin математика bitcoin crane
bitcoin status lurkmore bitcoin bitcoin land транзакции ethereum bitcoin metatrader