Since the global COVID-19 pandemic, people have been looking for an alternative to keeping their savings in their domestic currencies. Some of them choose precious metals, others, crypto. Who made the better decision?
What people are more willing to choose?
In times of crisis more and more people want to invest their money. But what to choose? Many people bet on Bitcoin and other cryptocurrencies, but is it always a good choice? A person who has no idea about the market can easily lose his or her money by investing at the wrong time. The first, most important rule is to look at the market and rely on the data, not just your hunch.
What makes a new all-time high first?
— Mati Greenspan ( The Forecaster) (@MatiGreenspan) June 23, 2020
BTC cannot be faked
Many people believe that gold is more safe than crypto. However, coins are authentic and cannot be forged or reduced in value. This cannot be said of gold.
Recently, the network was raging after one of the largest jewelry companies in China – Wuhan Kingold Jewelry was accused of using fake gold bars to secure a credit transaction. The $2.8 trillion loans was to be secured by gold-plated copper instead of gold. The company denies the charges.
What are the advantages of cryptocurrencies?
Limited supply and high transaction security are just some of the advantages of cryptocurrencies. However, we have to admit that their value is not constant and changes every day. According to people who invest in crypto, the most important thing is that they can be sure of the authenticity of their coins, while gold often turns out to be counterfeit. Quoted case of fake gold is neither the first nor the last and it is hard to avoid this type of misrepresentation.
There are some criticisms
Opponents of the cryptocurrencies are also entering the discussion, pointing out the uncertain value of the crypto as the main obstacle to a meaningful investment.
This just shows you how delusional #Bitcoin bugs are. Given how much further Bitcoin is from its record high relative to the Dow Jones or #gold, they still expect it to make a new high first. Hope is never a good investment strategy. https://t.co/LOaHu0e4hs
— Peter Schiff (@PeterSchiff) June 30, 2020
Peter Schiff points out that BTC is very far from its record value and investing in it is not a good idea. In his opinion, it is based only on illusory hopes.
Let’s compare BTC and gold
In theory, gold is a very safe investment – the legal way of trading, weighing, and tracking it is impeccable, while cryptocurrencies are not legally protected and there are various scams in history that are not punished by law.
Bitcoin and gold are limited resources, but we know exactly how much BTC will be in circulation, and in the case of gold we do not know how much more will be discovered.
Both BTC and gold have very liquid markets where they can easily be exchanged for fiat money.
As far as volatility is concerned, Bitcoin changes its value significantly compared to gold, while the value of this precious metal remains at a similar level. This is both pros and cons. More volatility gives you the opportunity to earn more money, but also more losses.
What is better choice?
If you are looking for a certain investment, gold may be a better idea for you, but you can’t count on big profits. However, by investing with the right knowledge in crypto you can increase the wealth of your portfolio. The choice is yours.