Many people have coined (pun intended) bitcoin as “digital gold” in reference to the cryptocurrency’s value outside of the traditional stock market. But is bitcoin really just “digital gold”? Are bitcoin and physical gold really on the same level?
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It depends on your goals. Bitcoin is a better investment for short-term potential gain—but you also have the potential to lose a lot of money. Gold, however, is a stable investment that is almost guaranteed to return on your investment in the long term.
In the long term, gold has proven to be a stable investment. It has shown to increase in value over time, and the price of gold often rises when the economy is in a recession. Because it has been used for many years as a form or backing of currency, it is a stable investment in that way as well.
Gold has long been used as currency around the world and across time periods. Its beauty, utility, and scarcity have made it an ideal baseline for trading and attributing value. Because it’s been used for nearly as long as civilizations have been around, it has stood the test of time and proved its inherent value. When you invest in gold, you can be certain that it won’t just stop having value one day.
If you have your gold stored in a precious metals IRA, it will be stored in a specific, safe vault that is overseen by a custodian who will manage your account. These accounts are often insured up to a certain amount, much like a traditional bank account, so you can rest easy knowing your investment is safe.
In the event of an economic crisis where traditional fiat currency is no longer viable, gold can be used as a currency. However, gold is not currently a viable means of buying something. While technically some gold coins are recognized as currency, the value of the gold that the coin is made of is often worth more than the face value of the coin.
When you invest in gold, you actually own a physical item that must be safely stored somewhere. A precious metals IRA is a popular and safe option.
If you choose to store your gold in your home, it must be stored in a safe or vault, and even then it has the possibility to be stolen from your possession.
Because bitcoin is completely digital, it can easily be transferred to another user and sold for its USD value. You can meet with another user and transfer your bitcoin in person using a QR code, or you can use a third-party exchange service that will digitally connect you with a buyer.
As long as you have a mobile wallet app that allows you to pay with bitcoin, you can use it as a digital currency at any store that accepts bitcoin. Bitcoin cannot be used everywhere as a form of payment, but some large retailers accept it.
Relatively speaking, bitcoin is new—it’s only been around for 10 years. Because of that, it’s considered an emerging investment and has the potential to exponentially increase in value. Investing in bitcoin now could lead to big payoffs down the road. Many people have already cashed out on their bitcoin investments and retired.
Because bitcoin is an emerging investment, it’s also extremely volatile, meaning it is susceptible to large price fluctuations in a short period of time. Any volatile investment has the potential to return greatly, but it also has the potential to crash just as heavily.
While bitcoin is completely digital, you still need a place to store it—whether on a web platform, mobile wallet, or physical hard drive. There are benefits and drawbacks to each storage option. Web-based wallets are able to be hacked, and your bitcoin can be stolen. Physical wallets, such as a flash drive or external hard drive, can be stolen from your possession.
The price of bitcoin is, in part, subject to the presence of other cryptocurrencies. Because bitcoin’s value lies in supply and demand, if the demand for another cryptocurrency exceeds that of bitcoin, the value could decrease. While bitcoin still reigns supreme, the possibility is there.
Buy Gold today.
Coins and bars available depending on your needs.