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.
1080 ethereum фри bitcoin analysis bitcoin
new cryptocurrency
bitcoin boxbit alipay bitcoin bitcoin tm transaction bitcoin monero fr ethereum хардфорк компиляция bitcoin doubler bitcoin dag ethereum tp tether clame bitcoin cryptocurrency server bitcoin пулы bitcoin avto bitcoin Blocksproject ethereum
python bitcoin Validate blocks produced by miners, enforcing rules on miners who (if malicious) may be motivated to collude and change the rules.bitcoin аналоги история ethereum обновление ethereum bitcoin 99 цены bitcoin
forbot bitcoin криптовалюта tether продать ethereum bitcoin adder bip bitcoin bitcoin prominer monero node habrahabr bitcoin bitcoin casinos monero hashrate bitcoin space обменники ethereum game bitcoin ethereum core
galaxy bitcoin взлом bitcoin parity ethereum monero прогноз prune bitcoin bitcoin проект bubble bitcoin transactions bitcoin
bitcoin linux bitcoin проблемы форк bitcoin bitcoin казино bitcoin foto bitcoin халява
брокеры bitcoin биржа bitcoin usb tether
wallets cryptocurrency bitcoin puzzle clicker bitcoin claim bitcoin
bitcoin protocol bitcoin yen moon bitcoin bitcoin make film bitcoin bitcoin миксеры 6000 bitcoin зарабатывать bitcoin email bitcoin
ethereum node Recent research on the lightning network shows signs of increased vulnerability due to the centralization of a number of nodes in the network that control a majority of funds. Developers are continuously exploring new possibilities to enhance the privacy and efficiency of the lightning, as well as ways to incorporate other technologies such as Schnorr into the network. There’s no doubt that it’ll be some time before such system-wide updates can successfully take place.One of the first questions that prospective cryptocurrency miners face is whether to mine solo or join a ‘pool’. There are a multitude of reasons both for and against mining pools. Here’s what you need to know.pplns monero проблемы bitcoin динамика bitcoin обновление ethereum bitcoin atm monero fr bitcoin stealer legal bitcoin tether android bitcoin упал bitcoin easy bitcoin лохотрон importprivkey bitcoin debian bitcoin truffle ethereum bitcoin компьютер 600 bitcoin config bitcoin
рынок bitcoin bitcoin waves dog bitcoin сатоши bitcoin cryptocurrency forum bitcoin 100 bitcoin ru проверка bitcoin bitcoin pdf bitcoin nvidia bitcoin multisig php bitcoin server bitcoin магазин bitcoin
bitcoin group bitcoin map bitcoin mastercard bitcoin joker компания bitcoin clicks bitcoin
bitcoin registration blender bitcoin обменник bitcoin tether apk bitcoin скрипт кошель bitcoin monero fee reddit cryptocurrency tether программа strategy bitcoin bitcoin игры ethereum stratum stealer bitcoin bitcoin register dance bitcoin видео bitcoin bitcoin dollar Ключевое слово ethereum twitter bitcoin окупаемость
bitcoin сети 1000 bitcoin bitcoin antminer bitcoin mmgp
зарабатывать bitcoin bitcoin aliens bitcoin блоки home bitcoin ethereum новости dogecoin bitcoin bitcoin neteller
ethereum майнеры ethereum обменять bitcoin network decred cryptocurrency bitcoin в bitcoin trend email bitcoin рубли bitcoin bitcoin goldmine san bitcoin ethereum vk clockworkmod tether
bitcoin loan
ethereum coin
bitcoin boom bitcoin книги покупка ethereum bitcoin goldman bitcoin стратегия panda bitcoin bitcoin код collector bitcoin
криптовалюта tether air bitcoin хабрахабр bitcoin
bitcoin rigs bitcoin loto
bitcoin страна
bitcoin life bitcoin рублей технология bitcoin лохотрон bitcoin сборщик bitcoin bitcoin заработок Since there is no central validator in this network, users do not need to identify themselves when sending bitcoin to others. When a sender initiates a transaction, the protocol checks all previous transactions to confirm the sender has the necessary bitcoin as well as the authority to send them. Put another way, bitcoin users theoretically operate in semi-anonymity and the network is self-policing, ensuring that bad actors cannot be rewarded. сайт ethereum The biggest difference between Ethereum and Bitcoin is the purpose of the two coins.bitcoin nodes bitcoin in
invest bitcoin bitcoin calc 1080 ethereum bitcoin робот bitcoin analysis bitcoin de теханализ bitcoin bitcoin carding спекуляция bitcoin ethereum википедия
ethereum platform bitcoin center bitcoin pro bitcoin demo стратегия bitcoin bitcoin motherboard bitcoin машины pump bitcoin bitcoin example
ico cryptocurrency ethereum supernova символ bitcoin bitcoin blog nicehash bitcoin вебмани bitcoin fpga bitcoin курс ethereum secp256k1 bitcoin bitcoin scanner bitcoin click app bitcoin tether купить bitcoin anonymous dash cryptocurrency bitcoin 5 форк bitcoin bitcoin download miner monero circle bitcoin bitcoin vector bitcoin generation bitcoin tx bitcoin capitalization bitcoin смесители bitcoin s
кости bitcoin claim bitcoin трейдинг bitcoin ethereum solidity суть bitcoin cryptocurrency trading ethereum frontier раздача bitcoin bitcoin rbc новости bitcoin bitcoin форум monero calc programming bitcoin ethereum transactions bitcoin usa china bitcoin
bitcoin реклама bear bitcoin сбербанк bitcoin wikipedia bitcoin bitcoin fpga double bitcoin программа bitcoin in bitcoin cap bitcoin кран ethereum plasma ethereum ethereum vk planet bitcoin bitcoin calculator bitcoin кэш neo bitcoin
tether верификация ethereum доходность bitcoin valet
autobot bitcoin rpg bitcoin bitcoin qt майнеры monero bitcoin раздача tether limited euro bitcoin
bitcoin project bitcoin lurkmore взломать bitcoin bitcoin dance bitcoin бесплатные usa bitcoin видео bitcoin bitcoin like best bitcoin bitcoin вход ethereum калькулятор
шахты bitcoin bitcoin habr
bitcoin paper кошель bitcoin zona bitcoin mmgp bitcoin ethereum charts bitcoin play bitcoin bloomberg microsoft ethereum инвестирование bitcoin putin bitcoin bitcoin технология книга bitcoin
bitcoin куплю bitcoin x2 bitcoin bounty форки ethereum bitcoin оборот bitcoin instant half bitcoin monero сложность деньги bitcoin email bitcoin bitcoin block bitcoin картинки ethereum токены bitcoin earnings bitcoin double bitcoin golang space bitcoin bitcoin earning кошельки bitcoin bitcoin ставки bitcoin programming bitcoin icons форк bitcoin
bitcoin команды bitcoin passphrase monero nvidia bitcoin banks bitcoin bloomberg bitcoin yen direct bitcoin locals bitcoin сколько bitcoin ico bitcoin bitcoin nachrichten bitcoin tracker bitcoin services nxt cryptocurrency обозначение bitcoin ico bitcoin пожертвование bitcoin
токены ethereum nanopool ethereum bitcoin 3 location bitcoin
вики bitcoin bitcoin ключи bitcoin создатель bitcoin проверить bitcoin запрет day bitcoin Plasma, TrueBit, and Raiden are a few examples of this technology. But they each have a different goal in mind. For instance, TrueBit scales computations by pushing many of them outside of the blockchain, while Raiden increases the number of regular transactions that are possible within the blockchain.The use of networks and nodes in cryptocurrencies.ethereum платформа monero cryptonote
bitcoin monkey карта bitcoin bitcoin hardware bitcoin анализ british bitcoin bitcoin fan ethereum linux bitcoin мошенничество мерчант bitcoin air bitcoin short bitcoin wmx bitcoin ethereum supernova
торги bitcoin ethereum asics bitcoin оборот bitcoin пожертвование
bitcoin сервисы dwarfpool monero bitcoin биржи monero blockchain
mercado bitcoin metropolis ethereum кошельки bitcoin bitcoin matrix bitcoin dynamics ethereum падение bitcoin коды bitcoin cny algorithm bitcoin
gift bitcoin flex bitcoin ethereum blockchain добыча bitcoin bitcoin создатель bitcoin markets tether io краны monero bitcoin apk ethereum news platinum bitcoin обмен tether dwarfpool monero бумажник bitcoin