In recent times, bitcoin and gold are the hot talks of the town. In the covid-19 pandemic, both the gold and bitcoin prices were impacted negatively. The prices of these massive resources have been completely dropped down. Also, due to the pandemic crisis, many people stopped trading commodities and digital currencies. Thus, these two resources impacted more in the marketplace. Many investors had a fear of which one to invest in 2021. Because already the 2020 covid pandemic crisis impacted bitcoin and gold price simultaneously.
Many techs, traders, startups, and entrepreneurs are investing in bitcoin rather than gold. Because the profit of investing in bitcoin is more than a bar of gold. But they also need to face the loss if the price of bitcoin falls. In most countries, traditional people will invest in gold. Also, the people who aren’t aware of digital currencies will invest in gold and other commodities like silver, platinum, and more.
If you are a person searching which one is better to invest in gold or bitcoin, then this article will help you to choose the best one to invest in 2021. So let us begin this electrifying article with…
What is Bitcoin?
Bitcoin is the first cryptocurrency developed using blockchain technology and found by Satoshi Nakamoto. He remains unknown in a white paper while introducing this open-source technology. Bitcoin is shortly mentioned as BTC. Bitcoin was first launched in 2009 and it is a kind of digital asset called cryptocurrency. It came into existence with the reward of 50BTC. Bitcoin is a decentralized form of digital cash system that avoids the need for intermediates like banks and governments to make financial transactions.
(image source: CNBC)
At the inception stage of the bitcoin, the price of a single bitcoin is below $1. But at the same time, only a few people used bitcoin for transactions. But now the current price equals more than $24k. Also, experts in the crypto space predict that it might reach more than $100k in the upcoming years. This digital currency is completely backed by code rather than real-time assets. Such as gold, silver, or by trust in central authorities like the USD, Euro, or more. You can buy and sell bitcoins only in the legalized crypto exchange platforms. Many countries across the globe are saying no to bitcoin and other digital currencies. So you need to check whether your country allows you to trade bitcoins or not.
Currently, bitcoin has great popularity in the trading platforms and crypto markets. Also, the bitcoin trading volume is high compared to other altcoins in the market. Thus, it becomes the most popular cryptocurrency worldwide. Until the existence of bitcoin in the market, it will be at the top position in the market place and high in liquidity. Even though the market is down, bitcoin will have constant growth in all the crypto trading platforms. Many people in the crypto space buy bitcoin and hold it for long term investment. Thus, only less than 10% of people are ready to sell bitcoins in the market.
Recently, bitcoin halving has happened in May 2020 and it is a third bitcoin halving with 6.25 BTC rewards. Already two halvings covered with the rewards of 25BTC and 12.5BTC and created great impacts in bitcoin price. The community team expects third bitcoin halving will again create a new historical peak in the crypto industry. So if you are investing your money in bitcoin now then you can earn enormous amounts of profits in the future.
Bitcoin Price Chart
(image source: Coin telegraph)
Benefits of using Bitcoin
This digital asset allows users to transfer from any part of the globe without any third-party intervention or other restrictions when fascinating digital currencies. Also, there is no intervention of central authority. So users can experience full independence while performing bitcoin trading.
Bitcoins are not on a physical form for transactions and trading, so it is completely digital. Bitcoins are free from the risk of imitation. These digital currencies are protected by high-end security systems that safeguard them from duplicating this digital currency in any way.
Security & Control
Bitcoin allows users complete control over their transactions. Users are free from the security threat of any taxes being levied on their transactions.
Anonymity & Identity Theft
No personal data will be attached to this kind of digital currency transaction. So it helps to protect users against identity theft. By using advanced encryptions and back-ups, it is possible to protect the bitcoin and make sure the safety of your transactions.
A bitcoin transaction is visible to everyone but the user details will be hidden. Every bitcoin user’s public address will be monitored. Thus, it allows for full transparency in transactions and can verify its blockchain.
Low Processing Fees
As I already mentioned in this article, bitcoin can be traded only in the crypto exchanges. The exchange owners will charge low trading fees for bitcoin compared to other cryptocurrencies.
These are the benefits one can get while holding the bitcoins in the crypto exchanges.
What is Gold?
I hope everyone will be aware of gold and how it is essential in our daily life. Gold is one of the costliest and precious metals that can be used by the human as a medium of exchange. Gold is widely regarded as a long-term investment and it is against trade volatility. The history of this precious metal will go beyond 3000-5000 years. In ancient times, gold is primarily a currency for citizens around the world. But many ancient civilizations and ancestors used this precious metal to create jewelry, decorative ornaments, and more. But in some cases, it is even used for creating a piece of medicinal equipment.
(image source: market watch)
Gold was used as currency in 600 B.C. by the Turks. This currency practice continued for many centuries until the middle of the 1800s. Then, many countries started shifting away from the use of gold currency in favor of a system called the Gold Standard. Under this gold standard system, citizens can use their traditional money to buy gold. The United States followed this gold standard from 1861 until 1934.
As of now, gold acts as a primary investment of real-time assets. This precious metal also allows investors to make lucrative money through the fluctuation of its value in the marketplace.
Gold Price Chart
(image source: goldprice[dot]org)
The above image shows a clear picture of the price chart of gold from January to December 2020.
Benefits of Gold
Gold has been in existence for more than 5000 years. So gold has proven to be a stable investment. This precious metal has shown an upsurge in value over time. Also, the price of gold often rises when the economy of the country is in a downturn. Because gold has been used for a huge number of years. Thus, it is a stable investment for investors.
Gold has long been used as currency around the globe in ancient periods. Its utility and scarcity have made this resource an excellent baseline for trading and attributing value. If you invest in gold now, you can earn profits in the upcoming years.
Safe in vault
If you have your gold stored in an Individual Retirement Account (IRA). Then it will be stored in a safe vault. These accounts are insured up to a certain amount. Like a traditional bank account. So you can know your investment is very safe in the vault.
(image source: finbold)
Bitcoin vs Gold – Which One to Invest?
Before we get into bitcoin vs gold, it is worth considering who has gained much popularity this year. Both bitcoin and gold gave many highlights in 2020. The price of gold in the summer is dropped and Bitcoin has gained huge momentum in the fall. But bitcoin managed to soar above $23k in the last 24 hours of international crypto trading.
Bitcoin is a suitable medium of payments across the globe. Gold cannot be kept in an online platform or any wallet. But bitcoin can be completely stored online via a digital wallet. For Gold, there will be an intermediate person for the transaction. So you have to pay the transaction fee and Maintenance charge. But in Bitcoin, there will be no third-party for the transaction and less transaction fee. For these reasons, many startups, entrepreneurs, and investors prefer bitcoin rather than gold.
(image source: Nasdaq)
The Final Words
I hope now, you have some ideas about bitcoin vs gold. These two resources are ruling the marketplace heavily all over the world. Both these resources are expensive for a normal citizen. But if you have an interest in trading on any one of these. Then you must have an in-depth analysis and market research on both bitcoin and gold. Check whether you have enough funds before investing in either bitcoin or gold. The short-term investment in bitcoin will lead you to either profit or loss in the trading market. So you can better go with long-term investment to earn more profits.