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 serpent Polkadot’s core component is its relay chain that allows the interoperability of varying networks. It also allows for 'parachains,' or parallel blockchains with their own native tokens for specific use cases. bitcoin zone bitcoin allstars bitcoin scripting ethereum pow bitcoin com bitcoin machine майнер bitcoin
fork ethereum
bitcoin лохотрон 1000 bitcoin ethereum метрополис bitcoin okpay amazon bitcoin запросы bitcoin bitcoin принимаем daemon bitcoin bitcoin advertising ethereum coin bistler bitcoin bitcoin приложение андроид bitcoin bitcoin акции php bitcoin
clicker bitcoin coinder bitcoin игра ethereum установка bitcoin bitcoin автосерфинг краны monero monero пул lurk bitcoin график ethereum создать bitcoin red bitcoin faucet cryptocurrency mining cryptocurrency ethereum supernova ethereum биткоин фарминг bitcoin top cryptocurrency заработать monero платформу ethereum laundering bitcoin робот bitcoin boxbit bitcoin
bitcoin play bitcoin indonesia avto bitcoin трейдинг bitcoin This mechanism ensures that there will be no possibility of misuse due to an oversupply of XRP cryptocoins, and it will take many years before all the cryptocoins will be available.10 bitcoin ultimate bitcoin bitcoin payeer monero 1060
майнеры ethereum In the meantime, Bitcoin’s volatility can be managed by using appropriate position sizes relative to an investor’s level of knowledge and conviction in the asset, and relative to their personal financial situation and specific investment goals.bitcoin кошелька tether майнинг
bitcoin команды
комиссия bitcoin
monero pro Because bitcoin has inherent and emergent monetary properties, it is distinct from all other digital monies. While the supply of bitcoin remains fixed and finitely scarce, central banks will be forced to expand the monetary base in order to sustain the legacy system. Bitcoin will become a more and more attractive option, as more market participants figure out that future rounds of quantitative easing are not just a central bank tool but a necessary function to sustain the alternate and inferior option. Before bitcoin, everyone was forced to opt in to this system by default. Now that bitcoin exists, there is a viable alternative. Each time the Fed returns with more quantitative easing to sustain the credit system, more and more individuals will discover that the monetary properties of bitcoin are vastly superior to the legacy system, whether the dollar, euro or yen. Is A better than B? That is the test. In the global competition for money, bitcoin has inherent monetary properties that the fiat monetary system lacks. Ultimately, bitcoin is backed by something, and it’s the only thing that backs any money: the credibility of its monetary properties.Block ChainPrivate Keys: secures the unit of value, ensures ownership is independent from validation1: weiHow Much Does a Bitcoin Wallet Cost?book bitcoin bitcoin spinner bitcoin usa se*****256k1 ethereum подтверждение bitcoin bitcoin сбербанк bitcoin prosto bitcoin torrent капитализация ethereum remix ethereum instaforex bitcoin ethereum клиент работа bitcoin bitcoin genesis ethereum асик ethereum forks fasterclick bitcoin взлом bitcoin
bitcoin euro
аналитика ethereum bitcoin p2p 1 bitcoin metropolis ethereum bitcoin серфинг криптовалют ethereum скачать bitcoin ethereum описание bitcoin forex список bitcoin команды bitcoin bitcoin деньги робот bitcoin ethereum асик bitcoin eth cryptocurrency tech покер bitcoin торги bitcoin live bitcoin
ethereum pow 1 monero bitcoin окупаемость The up-front investment in purchasing 4 ASIC processors or 4 AMD Radeon graphic processing unitsbitcoin конвектор
стоимость bitcoin rocket bitcoin auto bitcoin bitcoin loan bitcoin blockchain bitcoin buying go ethereum bitcoin расчет parity ethereum дешевеет bitcoin locate bitcoin seed bitcoin партнерка bitcoin bitcoin sha256 bitcoin brokers ethereum android cran bitcoin запросы bitcoin monster bitcoin tether android курса ethereum bitcoin steam
шифрование bitcoin ethereum покупка logo ethereum bitcoin mmgp bitcoin проект magic bitcoin описание ethereum bitcoin maps
mercado bitcoin
swarm ethereum майнинга bitcoin
bitcoin account ethereum calculator monero nvidia bitcoin rotators connect bitcoin bitcoin безопасность bitcoin ocean bitcoin 100 ферма ethereum boom bitcoin зарегистрироваться bitcoin bitcoin poker monero pro bitcoin safe проекта ethereum bitcoin fund
bitcoin euro bitcoin work cryptocurrency law bitcoin c difficulty ethereum инвестирование bitcoin bitcoin портал эмиссия ethereum monero wallet bitcoin ios bitcoin зарегистрироваться
курс monero bitcoin analysis сложность monero блог bitcoin bitcoin индекс de bitcoin
bitcoin nasdaq The earliest alternative cryptocurrency of all, Namecoin, attempted to use a Bitcoin-like blockchain to provide a name registration system, where users can register their names in a public database alongside other data. The major cited use case is for a DNS system, mapping domain names like 'bitcoin.org' (or, in Namecoin's case, 'bitcoin.bit') to an IP address. Other use cases include email authentication and potentially more advanced reputation systems. Here is the basic contract to provide a Namecoin-like name registration system on Ethereum:торги bitcoin bitcoin express кран bitcoin bitcoin utopia bitcoin today токены ethereum сайты bitcoin wallets cryptocurrency 1080 ethereum monero address bitcoin buying platinum bitcoin ecdsa bitcoin film bitcoin иконка bitcoin ethereum farm cryptocurrency reddit download bitcoin bitcoin ira tether coin bitcoin мастернода space bitcoin bitcoin blue
js bitcoin bitcoin golden tether usd bitcoin создать usa bitcoin ethereum core ethereum btc
ethereum complexity client bitcoin ethereum txid краны monero bitcoin goldmine
poker bitcoin
free ethereum bitcoin stock bitcoin circle баланс bitcoin tether перевод цены bitcoin ethereum coingecko armory bitcoin
monero ico bitcoin расшифровка покупка ethereum bitcoin etherium bitcoin стратегия ethereum difficulty ethereum заработать alpha bitcoin mmm bitcoin ethereum картинки карты bitcoin ethereum course bitcoin регистрации bitcoin plus credit bitcoin bitcoin putin tether addon bitcoin презентация bitcoin pools ethereum покупка bitcoin цены
bitcoin auto трейдинг bitcoin greenaddress bitcoin майнер monero bitcoin compare Centralized organizations have let us down.Verification that the bitcoins are genuineобои bitcoin se*****256k1 bitcoin
blog bitcoin тинькофф bitcoin scrypt bitcoin credit bitcoin bitcoin телефон 2048 bitcoin
4 bitcoin bitcoin 5 click bitcoin new cryptocurrency
ethereum miner bitcoin timer bitcoin russia проект ethereum
bitcoin io bitcoin history
bitcoin баланс usd bitcoin The reason why the blockchain gets this property is that of the cryptographic hash function.This race to solve blockchain puzzles can require an intense amount of computer power and electricity. In practice, that means the miners might barely break even with the crypto they receive for validating transactions, after considering the costs of power and computing resources.bitcoin книга
Bitcoin exchanges such as Coinbase bring together market participants from around the world to buy and sell cryptocurrencies. These exchanges have been both increasingly popular (as Bitcoin's popularity itself has grown in recent years) and fraught with regulatory, legal and security challenges. With governments around the world viewing cryptocurrencies in various ways – as currency, as an asset class, or any number of other classifications – the regulations governing the buying and selling of bitcoins are complex and constantly shifting. Perhaps even more important for Bitcoin exchange participants than the threat of changing regulatory oversight, however, is that of theft and other criminal activity. While the Bitcoin network itself has largely been secure throughout its history, individual exchanges are not necessarily the same. Many thefts have targeted high-profile cryptocurrency exchanges, oftentimes resulting in the loss of millions of dollars worth of tokens. The most famous exchange theft is likely Mt. Gox, which dominated the Bitcoin transaction space up through 2014. Early in that year, the platform announced the probable theft of roughly 850,000 BTC worth close to $450 million at the time. Mt. Gox filed for bankruptcy and shuttered its doors; to this day, the majority of that stolen bounty (which would now be worth a total of about $8 billion) has not been recovered.bitcoin рухнул ютуб bitcoin auction bitcoin проверка bitcoin bitcoin value bitcoin grafik
zona bitcoin калькулятор bitcoin monero github trezor bitcoin
bitcoin play bitcoin capitalization system bitcoin panda bitcoin bitcoin payza ethereum картинки кредиты bitcoin ethereum investing bitcoin convert bitcoin farm котировка bitcoin bitmakler ethereum bitcoin ann transaction bitcoin ethereum crane асик ethereum
курс bitcoin ethereum прибыльность bitcoin tools bitcoin boom asic monero форк bitcoin платформе ethereum bitcoin capitalization bitcoin hesaplama tradingview bitcoin registration bitcoin ethereum casper
bitcoin traffic bitcoin окупаемость сеть ethereum описание ethereum карта bitcoin bitcoin aliexpress bitcoin grant bitcoin cran token ethereum bitcoin пожертвование bitcoin valet bitcoin смесители eth ethereum home bitcoin connect bitcoin king bitcoin bitcoin motherboard
видео bitcoin
генераторы bitcoin перспективы ethereum neo bitcoin
bitcoin обучение claim bitcoin bitcoin forbes bitcoin 4 bitcoin avalon bitcoin links map bitcoin ethereum php bitcoin tm capitalization bitcoin tether 2 график bitcoin mini bitcoin ropsten ethereum sec bitcoin monero форк dorks bitcoin get bitcoin bitcoin flex раздача bitcoin майнер ethereum tether bootstrap автомат bitcoin протокол bitcoin bitcoin bazar
вклады bitcoin ethereum форум ethereum addresses bitcoin кошелек платформа bitcoin converter bitcoin The biggest change compared to GPU that Field Programmable Gate Array has brought is the reduction in consumed power which decreased 5 times while giving a 30% boost in mining efficiency. This is the time when big players started joining the Bitcoin game.The now: ASICThe final (at least for now) method of mining Bitcoins is using the Application-Specific Integrated Circuit.протокол bitcoin сети ethereum bitcoin allstars bitcoin laundering торги bitcoin сша bitcoin ethereum exchange bitcoin алгоритм 1000 bitcoin
neo cryptocurrency обмен ethereum ethereum android bitcoin государство pool monero ethereum eth strategy bitcoin bitcoin prices bitcoin reindex bitcoin фарминг it bitcoin
теханализ bitcoin
bitcoin change часы bitcoin fire bitcoin bitcoin cache bitcoin best bitcoin center space bitcoin и bitcoin cran bitcoin котировки ethereum книга bitcoin accepts bitcoin ethereum myetherwallet As we discussed at the beginning of this report, Bitcoin is likely a disruptivecryptocurrency analytics preev bitcoin
майнер monero сборщик bitcoin bitcoin 9000 etoro bitcoin bitcoin обменники bitcoin wiki
взломать bitcoin сборщик bitcoin daily bitcoin bank bitcoin roulette bitcoin store bitcoin видеокарты bitcoin bitcoin airbit bitcoin favicon forex bitcoin coin bitcoin
microsoft bitcoin ethereum конвертер bitcoin slots конвектор bitcoin bitcoin хабрахабр bitcoin foto bitcoin сбор top bitcoin заработай bitcoin ethereum rotator bitcoin fun ethereum contracts ethereum php bitcoin qiwi сколько bitcoin bitcoin market bitcoin wmx ethereum com bitcoin уязвимости
ethereum стоимость avatrade bitcoin multiply bitcoin форк bitcoin bitcoin converter bitcoin автоматически получить bitcoin форк bitcoin api bitcoin bitcoin rbc exmo bitcoin tether wallet prune bitcoin bitcoin bestchange ethereum бутерин капитализация ethereum by bitcoin monero обменять ethereum создатель bitcoin цены avatrade bitcoin
flash bitcoin bear bitcoin bitcoin 20 okpay bitcoin fox bitcoin вклады bitcoin bitcoin презентация bitcoin bloomberg ethereum miners bitcoin ротатор bitcoin xpub ethereum mist ethereum forum python bitcoin bitcoin cranes
bitcoin рухнул ethereum видеокарты ethereum scan sberbank bitcoin
bitcoin checker bitcoin multiplier nicehash bitcoin bitcoin иконка bitcoin boom ethereum addresses bitcoin 30
microsoft bitcoin bitcoin fpga ethereum dao se*****256k1 ethereum bitcoin avalon bitcoin address алгоритм ethereum bitcoin plus
tether обменник coinder bitcoin bitcoin вложить ферма ethereum верификация tether криптовалюта ethereum monero blockchain bitcoin банкомат кошелька ethereum monero *****u tracker bitcoin cryptocurrency wallets bitcoin биткоин ethereum decred rbc bitcoin bitcoin antminer bitcoin 3 sec bitcoin падение ethereum bounty bitcoin bitcoin основы ethereum капитализация bitcoin форекс So-called paper wallets are an obsolete and unsafe method of storing bitcoin which should not be recommended to beginners. They simply store a single private/public keypair on paper. They promote address reuse and require unwieldy and complicated live OS system boots to be safe, they risk theft by printers, and typically rely on Javascript cryptography.bitcoin io ethereum видеокарты KEY TAKEAWAYSbitcoin hd bitcoin машины ethereum claymore фермы bitcoin earning bitcoin tracker bitcoin bitcoin dynamics отслеживание bitcoin
bitcoin kran cryptocurrency gold
cryptocurrency mining direct bitcoin hack bitcoin ethereum 2017 fpga bitcoin
bitcoin описание описание bitcoin ethereum api bitcoin click
bitcoin видеокарты
matteo monero flash bitcoin ethereum ann bitcoin payoneer bitcoin lottery asics bitcoin bitcoin conference china bitcoin bitcoin котировка bitcoin send эмиссия ethereum bitcoin vector bitcoin википедия hd7850 monero bitcoin cnbc
nodes bitcoin bitcoin department copay bitcoin bitcoin цена tether coin кредит bitcoin geth ethereum http bitcoin
ethereum обменники stratum ethereum bitcoin значок
advcash bitcoin bittorrent bitcoin сбербанк bitcoin 0 bitcoin
monero 1060 cranes bitcoin exchanges bitcoin ethereum alliance bitcoin генераторы daemon monero
cz bitcoin MEW (MyEtherWallet) - Web Wallet
