“People are asking, has gold lost its luster?” — Paul Ebeling
The last 20 yrs would certainly show gold as an asset that has just grown over time but Y 2021 is a different story.
Gold is down by 9% while other classes including real estate, stocks and USD have risen. What is surprising is that USD’s value generally moves in tandem with precious metals, but even the Buck has grown by 3% this yr.
During a recession, the typical course of action would be to use gold as a hedge against stock market volatility.
With gold moving sideways and cryptocurrencies seeing a massive Bull run over the last 2 yrs, last wk we began drawing a case to determine which is the better investment: gold or bitcoin?
Gold has been present for 1000s of yrs as a safe and reliable asset. A Key reason why people respect gold is that it is a reliable source of protection that has stood the test of time, whereas bitcoin has not been around during a big financial crisis such as the Great Depression even though it was created specifically to avoid such a crisis.
Central banks, significant government organisations, pension funds, and astute wealth management offices have always had a portion of their portfolios in physical gold.
Even though gold prices have fluctuated in the short term, much like the stock market, the precious Yellow metal’s value has stayed relatively steady over time. In light of the fact that we are living in a period of high market volatility, it may be prudent to invest a small part of portfolios in gold.
Gold prices can rise as a result of inflation, making it a good inflation hedging investment. When prices rise, the worth of paper currencies declines, but the value of gold normally increases too.
India, which is 1 of the largest investors in gold worldwide, has also seen a massive boost to its bitcoin industry. Thanks to crypto exchanges like CoinSwitch Kuber and the likes, more people are investing digitally in cryptocurrency like bitcoin, right from the comfort of their homes. This begs the Big Q: Is cryptocurrency really the future of investments?
Bitcoin: The digital gold; bitcoin is the most valuable cryptocurrency in the world, measured by market capitalization.
Unlike the stock market, which is only open for trade through the week from 9:30 a.m. to 4:00 p.m. EST, the cryptocurrency exchanges are open 24/7/365 allowing traders to exchange bitcoin and other digital products or assets around the clock.
Another important characteristic of Bitcoin is that it has a finite supply.
Bitcoin is similar to gold in that it is not issued by a central banking system or a federal government. Bitcoin is a decentralized cryptocurrency that is produced by the collective computational power of “miners,” individuals and groups of people who work to verify transactions that take place on the bitcoin network, and are then compensated with bitcoins in exchange for their time, computing power, and effort.
In order to prevent the market from being oversaturated, the bitcoin protocol specifies that these awards be halved on a regular basis, guaranteeing that the final bitcoin will not be awarded until approximately the Y 2140.
Ultimately, the question is this, what should I invest in now Gold or Bitcoin?
Bitcoin gained a massive market cap of $1-T in early Y 2021. However, the market crashed and most of the gains got washed out around May. It still managed to rally back and now over its January price.
When I go with this data, then Y 2021 it is the yr of Bitcoin.
With this in mind, you can make a smart decision and invest in Bitcoin if you have not started already. It holds a face when compared to gold, and with emerging trends, bitcoin and other cryptos are just going to continue growing with time, even if the volatility factor is high.
Have a happy, healthy holiday weekend, Keep the Faith!