- Gold hit its highest point since January 8th at $1884.
- Digital currency, Bitcoin had a great run this year reaching its highest point above $64000 before entering into its recent troubles.
- The Bitcoin and gold debate has been ongoing since the mass adoption of cryptocurrencies.
- With recent troubles for Bitcoin and the rise in the value of gold, the last one seems to be winning slowly and steadily.
The search for the ultimate store of value between gold and Bitcoin has been ongoing since the mass adoption of the cryptocurrency giant. With many financial experts on both sides, the debate seems to be a stalemate with some people arguing from a point of emotions based on where they put their money.
Popular among these arguments was the recent debate between Michael Saylor, the CEO of MicroStrategy who became the first CEO to convert a part of his company’s cash reserves to Bitcoin, and Frank Giustra, an investor who backs gold. Over the years, many arguments have been put forward for both assets based on changes in the market.
What Asset Should You Own: Gold or Bitcoin?
Several arguments have been put forward for both assets. In support of gold as the safe-haven asset, experts argue that it has existed for thousands of years and been valuable through the centuries, whereas bitcoin is relatively new and has only been around just over a decade. While there is hype around Bitcoin, it hasn’t proven itself yet.
For Bitcoin, arguments favor its safety since it’s on the Blockchain and can’t be physically stolen like fiat currency or gold. Bitcoin is also easily divisible and can be distributed to billions of people with each piece still having value, unlike a gold bar.
In recent times, Bitcoin has doubled its value with its market capitalization moving above $1 trillion. Bitcoin and other cryptocurrencies are seen as investment opportunities for getting rich quickly.
On the other hand, gold enthusiasts believe that Bitcoin is too volatile to be a store of value and although bitcoin grew as a result of the pandemic and gold was slow, gold is still the go-to asset for long-term investment.
Furthermore, gold has been backed by the government while cryptocurrencies face a threat of a ban by governments with countries like China already making moves to shut down exchanges. Bitcoin enthusiasts posit that due to the decentralized nature of Bitcoin, more people including government officials will hold the asset thereby making it difficult to ban completely.
On the Flipside
The Future of the Assets
Both assets have a future in the markets but recent events may be swinging the pendulum back towards gold. Gold has been relatively stable over the years unlike Bitcoin whose volatility keeps causing problems for investors.
The unregulated nature of Bitcoin is also bad for investors. The price of gold reached a record high since January 8th of $1884 as inflation concerns loom over the market.
On the other hand, Bitcoin can still change the tide to this first quarter form that saw it do wonders in the market. The cryptocurrency market capitalization soared above $1 trillion taking the total cryptocurrency market capitalization to $2 trillion.
Bitcoin will also gain as more countries look to launch their Digital currencies like China and the digital Yuan and Bahama’s Sand Dollar. Bitcoin can still ride above gold again.