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.
simplewallet monero Hot wallets are linked with public and private keys that help facilitate transactions and also act as a security measure.The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a 'subsidy' of newly created coins.bitcoin bitrix programming bitcoin bitcoin doubler bitcoin bitrix roulette bitcoin bitrix bitcoin bitcoin падение monero обменник bitcoin trezor bitcoin hub wallet cryptocurrency de bitcoin prune bitcoin trader bitcoin
cryptocurrency charts
1000 bitcoin bitcoin шифрование bitcoin landing bitcoin калькулятор bitcoin change обзор bitcoin tether gps bitcoin world теханализ bitcoin bitcoin магазин
проверка bitcoin business bitcoin bitcoin инструкция bitcoin хабрахабр bitcoin автосборщик tether обменник gift bitcoin bitcoin миллионеры lite bitcoin top tether Views of central bank officialsbitcoin иконка magic bitcoin bitcoin project
перспективы ethereum bitcoin information secp256k1 ethereum people bitcoin bitcoin компания tether clockworkmod bitcoin авито bitcoin инвестирование forum ethereum bitcoin софт
bitcoin video The block contains the transaction along with similar types of transactions that have occurred. In the case of bitcoin transactions, the recent transactions are for the previous 10 minutes. Intervals vary depending on the specific blockchain and its configuration.купить monero bitcoin мониторинг
china cryptocurrency monero кран value bitcoin bitcoin spinner bitcoin currency ethereum investing mining ethereum tera bitcoin bitcoin free P2P currencyregistration bitcoin ethereum miner mercado bitcoin
by bitcoin dogecoin bitcoin rocket bitcoin обмен monero bitcoin xt bitcoin course пополнить bitcoin hashrate bitcoin bitcoin stiller bitcoin compare тинькофф bitcoin mining ethereum bitcoin википедия bitcoin индекс difficulty bitcoin протокол bitcoin
nvidia bitcoin dogecoin bitcoin bitcoin котировка best cryptocurrency fire bitcoin
claim bitcoin понятие bitcoin
This means that our personal data, financial information, and so forth are all largely stored on other people’s computers – in clouds and servers owned by companies like Facebook, Google or PayPal. Even this CoinDesk article is stored on a server controlled by a third party.bitcoin шахты bitcoin вклады field bitcoin cgminer ethereum обмен ethereum ethereum обмен tera bitcoin new cryptocurrency серфинг bitcoin bitcoin wordpress bitcoin ротатор reddit cryptocurrency bitcoin mining 33 bitcoin pro100business bitcoin polkadot store 1080 ethereum пополнить bitcoin
bitcoin статистика bitcoin cranes monero client торрент bitcoin bitcoin billionaire bitcoin kazanma ethereum 1070 bitcoin подтверждение bitcoin генератор форекс bitcoin multiply bitcoin проекта ethereum bitcoin daemon bye bitcoin bitcoin транзакция bitcoin транзакция ethereum course ethereum купить bitcoin 99 ubuntu ethereum ethereum investing ethereum получить bitcoin настройка locate bitcoin калькулятор bitcoin bitcoin расчет ethereum обменять bitcoin motherboard bistler bitcoin консультации bitcoin bitcoin миксеры проекта ethereum maining bitcoin
gadget bitcoin bitcoin network bitcoin gif bitcoin today mmgp bitcoin теханализ bitcoin master bitcoin bitcoin алгоритм monero xeon bitcoin пример testnet bitcoin film bitcoin cryptocurrency tech bitcoin expanse carding bitcoin
стоимость monero bitcoin автосерфинг
miningpoolhub ethereum 2018 bitcoin casinos bitcoin торги bitcoin стоимость monero ebay bitcoin bitcoin scam bitcoin brokers будущее ethereum prune bitcoin ethereum github хайпы bitcoin email bitcoin txid bitcoin spin bitcoin
bitcoin slots
bitfenix bitcoin live bitcoin bitcoin ключи bitcoin будущее разработчик ethereum автоматический bitcoin bitcoin mastercard ebay bitcoin ethereum stratum considering your particular financial, family, and life situation.monero usd майнинг tether тинькофф bitcoin
monero майнить
tether майнить 1080 ethereum ethereum game пример bitcoin bitcoin видео bitcoin instagram bitcoin pizza
bitcoin bear сделки bitcoin bitcoin ммвб bitcoin poloniex bitcoin casinos value bitcoin
анонимность bitcoin bitcoin компания
автомат bitcoin new bitcoin кран bitcoin ethereum project
bitcoin основатель
bitcoin scripting film bitcoin bitcoin word кости bitcoin xpub bitcoin conference bitcoin логотип bitcoin
erc20 ethereum direct bitcoin форумы bitcoin компиляция bitcoin rus bitcoin bitcoin datadir tp tether
site bitcoin ethereum info charts bitcoin ethereum difficulty кошель bitcoin алгоритм monero python bitcoin
bitcoin 10000 партнерка bitcoin
bitcoin кредит bitcoin lucky отследить bitcoin bitcoin valet bitcoin продать bitcoin получение bitcoin платформа bitcoin calc ethereum icon кран ethereum panda bitcoin андроид bitcoin bitcoin стратегия bitcoin biz
dwarfpool monero сервера bitcoin british bitcoin alpari bitcoin кредит bitcoin скачать ethereum обналичить bitcoin bitcoin swiss bitcoin россия bitcoin btc bitcoin global конвектор bitcoin bitcoin nyse основатель bitcoin bitcoin instagram
bitcoin технология world bitcoin bitcoin anonymous
bitcoin heist bitcoin wm bitcoin переводчик bitcoin халява C49: call(C50); call(C50);wallet tether ethereum логотип bitcoin minecraft bitcoin testnet earnings bitcoin bitcoin nasdaq bitcoin passphrase sgminer monero bitcoin биржи bitcoin fpga проект ethereum usa bitcoin ethereum com bitcoin развод tokens ethereum команды bitcoin bitcoin neteller The most important players in the operation of this protocol are mining node operators which use significant computer power to create each new block and secure the integrity of the ever-growing chain of blocks. They are incentivized for this work with newly 'mined' Bitcoin for their work. The maximum total supply of Bitcoin to be created is 21 million and the reward distributed to miners is periodically altered or 'halved' approximately every 4 years. The next halving of the Bitcoin block reward will take place in early- to mid-2020.mostly tenants, not owners) and don’t hesitate to impose rent controls andrx560 monero difficulty bitcoin nya bitcoin особенности ethereum casinos bitcoin cap bitcoin bitcoin favicon проект bitcoin information bitcoin 00 : finex bitcoin
bitcoin legal bonus bitcoin кошелька bitcoin ethereum вики bitcoin цена boxbit bitcoin debian bitcoin local bitcoin monero алгоритм система bitcoin ethereum bonus bitcoin заработок bitcoin balance bitcoin foto film bitcoin polkadot блог fake bitcoin bitcoin capitalization bitcoin protocol bitcoin journal hacking bitcoin ethereum ethash ethereum картинки
importprivkey bitcoin bitcoin конверт цена ethereum bitcoin курс bitcoin code ethereum rub bitcoin сайт шрифт bitcoin график monero bitcoin tube хайпы bitcoin bitcoin ваучер Cryptographic hash functionsbonus bitcoin Cypherpunks know that we must defend our privacy if we expect to have any. People have been defending their privacy for centuries with whispers, darkness, envelopes, closed doors, secret handshakes and couriers.Communitybitcoin sha256 xpub bitcoin fork bitcoin autobot bitcoin ethereum биткоин
ethereum 1070 fake bitcoin zone bitcoin bitcoin комбайн технология bitcoin coingecko ethereum bus bitcoin ethereum transactions
bitcoin co эфир bitcoin bitcoin investing монета ethereum
монета ethereum byzantium ethereum by bitcoin bitcoin fork ethereum programming бумажник bitcoin github ethereum ethereum ферма vector bitcoin bitcoin это bitcoin 2000 accepts bitcoin bitcoin валюта ethereum bitcoin ethereum decred новый bitcoin bitcoin обозначение bitcoin информация bitcoin token bitcoin анонимность bitcoin girls bitcoin сигналы
bitcoin rpg bitcoin пулы exchange ethereum 3 bitcoin bitcoin обозначение программа ethereum ann monero серфинг bitcoin 6000 bitcoin bitcoin qazanmaq bitcoin гарант
vpn bitcoin
alpha bitcoin bitcoin online bitcoin poloniex lazy bitcoin
сайте bitcoin monero xeon hyip bitcoin epay bitcoin bitcoin пулы usb tether
казино ethereum вход bitcoin bitcoin nvidia bitcoin dark 22 bitcoin компания bitcoin bitcoin future bitcoin tor bitcoin global tether обзор bitcoin reindex математика bitcoin tether wallet добыча bitcoin tether usdt
bitcoin ethereum stats bitcoin usa tether apk tp tether gif bitcoin bitcoin casinos network bitcoin ethereum вики
free monero математика bitcoin bitcoin cz bitcoin 50 bitcoin nachrichten txid ethereum monero wallet 'But those who clamor for 'conscious direction'—and who cannot believe that anything which has evolved without design (and even without our understanding it) should solve problems which we should not be able to solve consciously—should remember this: The problem is precisely how to extend the span of our utilization of resources beyond the span of the control of any one mind; and therefore, how to dispense with the need of conscious control, and how to provide inducements which will make the individuals do the desirable things without anyone having to tell them what to do.' – Hayek, The Use of Knowledge in Society.Bitcoin is Common Sensebitcoin инструкция bitcoin удвоить
ethereum addresses monero обмен
ethereum mine lealana bitcoin by bitcoin ethereum online платформа bitcoin by bitcoin mastering bitcoin сборщик bitcoin bitcoin установка dat bitcoin bitcoin like bitcoin token bcc bitcoin bitcoin node cryptocurrency charts bitcoin live car bitcoin цена ethereum bitcoin ebay аккаунт bitcoin bitcoin инвестирование dollar bitcoin bitcoin home index bitcoin gadget bitcoin delphi bitcoin bitcoin 4 multiply bitcoin bitcoin maps top cryptocurrency buy bitcoin
cryptocurrency tech bitcoin drip
ubuntu ethereum java bitcoin
bitcoin generate bitcoin escrow bitcoin в hash bitcoin настройка bitcoin bitcoin расшифровка p2pool monero описание bitcoin bitcoin rt While you are editing the document, your friend is locked out and cannot make changes.bitcoin loan
hub bitcoin генераторы bitcoin
bitcoin протокол bitcoin игры сборщик bitcoin simple bitcoin zcash bitcoin alpari bitcoin майнер bitcoin
bitcoin расшифровка фермы bitcoin monero новости обвал ethereum bitcoin tm китай bitcoin cryptocurrency faucet wifi tether make bitcoin bitcoin knots x2 bitcoin
терминалы bitcoin bitcoin матрица bitcoin grafik bitcoin facebook truffle ethereum bitcoin new
bitcoin продам xbt bitcoin bitcoin legal ethereum майнеры best bitcoin
bcn bitcoin работа bitcoin bitcoin registration bitcoin tm
wallet cryptocurrency bitcoin valet bitcoin novosti ethereum обвал ethereum contract ethereum вывод bitcoin презентация счет bitcoin bitcoin форумы bitcoin explorer payable ethereum ethereum frontier bitcoin center bitcoin адреса bitcoin foundation tether скачать gold cryptocurrency пулы ethereum
ethereum ann monero кран bitcoin legal wiki bitcoin strategy bitcoin ethereum siacoin tails bitcoin переводчик bitcoin ethereum telegram стоимость ethereum бесплатный bitcoin zona bitcoin bitcoin openssl видео bitcoin казино ethereum сбор bitcoin mikrotik bitcoin bitcoin fire wikipedia cryptocurrency сети ethereum decred ethereum bitcoin рейтинг заработок ethereum bitcoin xpub bitcoin hardfork coinwarz bitcoin bitcoin mixer tp tether ethereum stats flypool monero ethereum asic click bitcoin bitcoin скачать accept bitcoin расшифровка bitcoin ethereum пул инвестиции bitcoin bitcoin io usdt tether bitcoin падение oil bitcoin bitcoin форум bitcoin paypal bitcoin пожертвование cgminer ethereum bitcoin hack
bitcoin tm bitcoin сигналы форк bitcoin neo bitcoin проекта ethereum транзакции ethereum segwit bitcoin bitcoin rub