Bitcoin vs Precious Metals: Where to Invest Today?

Where to invest today? This is one of the most common questions that investors ask themselves all the time. We compared Bitcoin and Precious Metals, analyzing key differences and similarities. This is what you need to know.

The recent global recession has led everyone to think about preserving their wealth, not just the elite. Many investors have turned to consider store-of-value assets such as Bitcoin and precious metals as ways to preserve one’s wealth.

Whenever analysts or amateur economists sense the smell of a looming recession, they come alive by sounding alarms and sending investors into a frenzied panic. The Great Recession of the 2000s was followed a decade later by the Covid-19 recession, one of the shortest but most catastrophic in history. The recession of recessions has renewed theinvestor interest in ensuring that they lose as little as possible in the event of a recession.

Hold a portion of the investment portfolio in Precious metals such as gold, silver can provides hedging against the losses that shares they can suffer during a downward economic trend. This has proven effective and still is, but a new alternative is challenging this old-fashioned capital preservation method. Bitcoin is proving to be an attractive asset for investors because it has been around long enough to get recognition and support, also showing some trends.

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Invest in Bitcoin

The history of the origins of the Bitcoin (BTC) is the one most people know about. It was originally created as a peer-to-peer electronic cash system by an anonymous figure in 2008. Under the pseudonym of Satoshi Nakamoto, this person (or group) has developed a system that allows two parties to transact directly with each other without involve a third party (intermediaries).

Bitcoin’s popularity has grown over time due to several factors. Today Bitcoin can be seen as excellent investment for portfolio diversification such as gold, many believe that the Bitcoin is a good hedge against inflation.

Bitcoin also has the potential to be a long-term store of value with a fixed offer that protects its value, unlike fiat currencies, which are government-issued currencies unsecured by a physical commodity and controlled by central banks.

Since its inception, the fascination with cryptocurrency has skyrocketed and has brought a number of strong supporters. Those who are confident about the future of cryptocurrencies believe that the price of Bitcoin will increase significantly in the coming years. Historical performances confirm the bullish trend of the first cryptocurrency:

Bitcoin (BTC) chart for the past 5 years

Trade Bitcoin (BTC) with a Regulated Broker

Investing in gold, silver and other precious metals

Widely regarded as an exceptional store of value for millennia and beyond, thegold is a tangible asset that people can easily pass down from generation to generation. It is also mainstream enough to be accessible to traders of all backgrounds in various economic situations.

Central banks also rely on the value of gold to help create economic stability and growth. The US itself used the gold standard until the 1970s, which some investors said was a safer option due to the volatility of current currencies. Others also believe that this reliability and longevity can survive cryptocurrencies. But that doesn’t mean that the value of gold is always the same. Its price has fluctuated over the years and is still erratic every day, and it does not generate current income like other investments, such as Bitcoin, can.

It is also worth noting that gold also has an environmental impact. All mining operations pose possible risks, including water pollution, toxic emissions and decreased biodiversity. It also has a history of human rights violations and the financing of armed conflicts.

GOLD chart of the last 5 years

Trade GOLD with a regulated Broker

Key differences and similarities

Since it has historically existed for much longer, gold is trusted by many investors. While Bitcoin doesn’t have age on its side, its own growing popularity reflects the genuine interest of investors.

Both Bitcoin and gold are available in lower quantities than other assets, and gold is also limited, just like many other natural resources. The law of supply and demand gives hope for higher prices for both.

Gold carries less risk than other investments than, for example, the real estate sector. The current system for trading it is relatively strong and it is difficult to corrupt the asset. Bitcoin traders are also safe from corruption due to their cryptographies, lack of a central system and complex algorithms. Not to mention the very real possibility of a security breach at any time.

Gold has many uses, from jewelry to dentistry to electronic manufacturing. It does not tarnish over time and is easily transported. Bitcoin has contributed to real-world applications of blockchain technology and also supports a global population that does not have access to traditional financing or banking methods.

Conclusion

There diversifying a portfolio can help mitigate risk and potential loss. Most investors incorporate this tactic into their investment strategy in some way; many argue that Bitcoin and gold can help.

Each has their own set of pros and cons and choosing to invest in any of them largely depends on where your investment priorities lie.

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