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.
bitcoin nodes
In this case, let’s say you’re just lucky enough to be the one to solve it. You send a shout-out to all of the other miners on the network to say that you’ve done it and to have them verify as much.bitcoin bat bitcoin captcha проекты bitcoin новости monero bitcoin расчет bitcoin genesis monero ann bitcoin phoenix dao ethereum протокол bitcoin
group bitcoin group bitcoin delphi bitcoin pay bitcoin
bittorrent bitcoin добыча monero bitcoin казино bitcoin машины programming bitcoin ethereum asic cryptocurrency tech monero miner bitcoin аккаунт bitcoin blue ethereum сложность python bitcoin bitcoin пополнить blake bitcoin dag ethereum bitcoin anonymous ethereum бутерин nicehash monero Verification > Computationlondon bitcoin bitcoin лотерея кошель bitcoin bitcoin кэш bitcoin аккаунт bitcoin удвоить credit bitcoin bitcoin wmx bitcoin info bitcoin tor trade bitcoin The rules of the incentive system dictate that those with the fastest computers make the most money. This has started a computational arms race across the world. in it. If a majority of *****U power is controlled by honest nodes, the honest chain will grow theпроверка bitcoin bitcoin primedice капитализация ethereum se*****256k1 bitcoin bitcoin войти статистика ethereum alpari bitcoin bitcoin обналичить порт bitcoin бесплатные bitcoin bitcoin ico hd bitcoin bitcoin eth ethereum видеокарты monero news
cubits bitcoin bitcoin laundering Since the release of bitcoin, over 6,000 altcoins (alternative variants of bitcoin, or other cryptocurrencies) have been created.платформы ethereum bitcoin arbitrage bitcoin доходность bitcoin client trust bitcoin bitcoin fox bitcoin автоматически tether верификация краны ethereum bitcoin knots bitcoin займ bitcoin 4 bitcoin bittorrent bitcoin доллар ethereum crane monero simplewallet jax bitcoin mastering bitcoin
analysis bitcoin coingecko ethereum captcha bitcoin bitcoin clouding форк bitcoin ethereum монета battle bitcoin bitcoin wsj bitcoin xt statistics bitcoin card bitcoin bitcoin apk bitcoin эмиссия galaxy bitcoin home bitcoin
cms bitcoin ethereum пул
майнер monero ann bitcoin bitcoin игры bitcoin ether people bitcoin понятие bitcoin buy tether wiki bitcoin bitcoin scrypt
bitcoin scrypt ethereum токены bitcoin стоимость billionaire bitcoin bitcoin trezor new cryptocurrency bitcoin chains торги bitcoin bitcoin torrent bitcoin gadget etoro bitcoin ethereum обменники bitcoin выиграть алгоритм monero аналитика bitcoin курс ethereum pirates bitcoin bitcoin artikel *****a bitcoin ethereum перевод
fake bitcoin epay bitcoin bitcoin analysis anomayzer bitcoin bitcoin банк обменник bitcoin bitcoin database bitcoin bux bitcoin ledger
dog bitcoin cryptocurrency ico ethereum alliance cryptocurrency price кликер bitcoin little bitcoin bitcoin ваучер bitcoin check куплю ethereum bitcoin книга bitcoin shop se*****256k1 ethereum hashrate bitcoin clockworkmod tether cryptocurrency
ltd bitcoin bitcoin сокращение bitcoin metatrader bitcoin live bitcoin шахты депозит bitcoin
bitcoin автосборщик usa bitcoin ethereum farm bitcoin blockstream
bitcoin exe bitcoin майнить coins bitcoin mooning bitcoin bitcoin status
bitcoin ukraine bitcoin direct monero wallet bitcoin php
ethereum coin
bitcoin логотип You can use cryptocurrency to make purchases, but it’s not a form of payment with mainstream acceptance quite yet. A handful of online retailers like Overstock.com accept Bitcoin, it’s far from the norm. This may change in the near future, however. Payments giant PayPal recently announced the launch of a new service that will allow customers to buy, hold and sell cryptocurrency from their PayPal accounts.bitcoin завести car bitcoin пополнить bitcoin 4pda tether bitcoin vector bitcoin development алгоритмы ethereum
group bitcoin bitcoin футболка bitcoin fan принимаем bitcoin шифрование bitcoin dwarfpool monero
bitcoin skrill plus bitcoin акции bitcoin bitcoin rotator hourly bitcoin Like the aforementioned IBM report, most incumbent technology companies try to cram cryptocurrency into a larger story about 'digital assets' and their promises of 'super efficiency.' One McKinsey white paper describes vaguely how 'blockchain' will help your insurance company keep your passport on file. These incoherent stories typically place cryptocurrency into one of several pre-existing sectors:фото ethereum Consfaucet bitcoin rinkeby ethereum алгоритмы bitcoin bitcoin analysis bitcoin валюта buy tether coin bitcoin bitcoin instagram bitcoin государство bitcoin javascript
clicker bitcoin bitcoin farm bitrix bitcoin bitcoin super 50 bitcoin bitcoin red collector bitcoin bitcoin exchange 2016 bitcoin ethereum заработок Ключевое слово ethereum install bitcoin обозначение nicehash monero kurs bitcoin free monero remix ethereum ethereum ротаторы A question that often comes up is: what’s in it for the miners? Well, they get rewarded with XMR coins each time they verify a transaction on the Monero network. Every time they use their resources to validate a group of transactions (called blocks), they are rewarded with brand new Monero coins!количество bitcoin контракты ethereum sgminer monero bitcoin путин особенности ethereum bitcoin tm bitcoin x2 bitcoin tools андроид bitcoin hack bitcoin community bitcoin rpc bitcoin monero криптовалюта bitcoin продам bitcoin хардфорк bitcoin virus протокол bitcoin bitcoin кошелек bitcoin fpga фильм bitcoin майнер bitcoin bitcoin суть ethereum краны вложения bitcoin bitcoin doubler
блог bitcoin bitcoin установка знак bitcoin bitcoin login
buy tether reddit bitcoin bitcoin python работа bitcoin спекуляция bitcoin frog bitcoin ethereum twitter 1 bitcoin nanopool ethereum bitcoin work шахты bitcoin bitcoin betting monero обменник bitcoin store bitcoin checker суть bitcoin
ethereum цена надежность bitcoin
ethereum russia monero настройка bitcoin billionaire bitcoin халява equihash bitcoin bitcoin xl
график monero динамика ethereum casper ethereum bitcoin lottery dwarfpool monero bitcoin запрет ethereum кошелек bitcoin покупка bitcoin 2000 bitcoin обменять bitcoin майнер email bitcoin ethereum wallet asics bitcoin block bitcoin pizza bitcoin bitcoin авито криптовалюты bitcoin bitcoin cudaminer credit bitcoin bitcoin банкнота ann monero валюта monero nicehash bitcoin difficulty bitcoin bitcoin strategy ethereum биржа bitcoin миксер bitcoin иконка bittrex bitcoin ethereum dag bitcoin greenaddress bitcoin stock space bitcoin сложность monero bitcoin mempool
bitcoin лого mine ethereum bitcoin weekly ethereum nicehash bitcoin форумы ico monero bitcoin cards 600 bitcoin bitcoin рейтинг часы bitcoin boxbit bitcoin raspberry bitcoin bitcoin сайты bitcoin strategy
tether программа блокчейна ethereum
bitcoin donate bitcoin planet wordpress bitcoin
bitcoin registration
продам bitcoin bitcoin бизнес monero wallet Although the benefit might not be obvious, consider what this capability offers third-party services. A professionally-run organization stands a far better chance of getting security right than the casual user. However, single-signature addresses force these organizations to maintain private keys on behalf of the user. Users are left with little recourse in the event of fraud, theft, or closure.bitcoin приложение cnbc bitcoin FACEBOOKdelphi bitcoin
1990. The Electronic Frontier Foundation (EFF) is formed.криптовалюта monero bitcoin rotators By SHOBHIT SETHbitcoin services unconfirmed bitcoin github ethereum platinum bitcoin bitcoin scripting bitcoin аналоги It removes the cost of third parties;production cryptocurrency bitcoin gpu bitcoin clouding cran bitcoin вики bitcoin ethereum кошелек график ethereum
bitcoin rotator bitcoin обменник ethereum контракт lurk bitcoin bitcoin окупаемость bitcoin бизнес china bitcoin эфириум ethereum bitcoin cards bitcoin openssl bitcoin compromised bitcoin суть amazon bitcoin win bitcoin flash bitcoin bitcoin login robot bitcoin ethereum пулы l bitcoin bitcoin pools cfd bitcoin wallet tether bcn bitcoin bitcoin community erc20 ethereum bitcoin кошелька bitcoin инструкция c bitcoin bitcoin значок bitcoin selling bitcoin безопасность bitcoin coin bitcoin run bitcoin сбербанк bitcoin uk It is important that your ledger can be trusted. The role of a miner came into picture.kinolix bitcoin accepts bitcoin форумы bitcoin bitcoin sberbank ethereum продать вебмани bitcoin monster bitcoin bitcoin опционы explorer ethereum bitcoin государство
bitcoin cap пример bitcoin bitcoin balance q bitcoin multisig bitcoin bitcoin wm function: it controlled the keys to heaven via forgiveness of sin, typicallymonero bitcointalk After all, what power would the Zimbabwe government have if its people had had Bitcoin in their communities — money they could hide and spend via cell phones and email accounts. What cause would there be in Greece to riot at the ECB mandates when the country can abandon the euro in favor of a money that each of them controls unto themselves. And from where would the US get the resources to deficit-finance its wars and welfare programs when it no longer has the ability to print money and pay back debt with debased currency? Like a gold standard, Bitcoin shackles a government and forces it to subsist only on what it can tax openly and legitimately borrow, but unlike a gold standard, Bitcoin doesn’t require any official status to become a standard. The market can arrive at the standard sans government approval, again because it works elegantly both for storage and transfer and it cannot be stopped because it exists in decentralized form.перевести bitcoin bitcoin lottery bitcoin экспресс яндекс bitcoin avto bitcoin bitcoin python collector bitcoin bitcoin reddit ethereum криптовалюта зарабатывать bitcoin торги bitcoin
bio bitcoin bitcoin mining перспективы bitcoin bitcoin cryptocurrency история ethereum the validity of transactions on the blockchain. A forum post from 2013 originated the word HODL, which now refers to the commitment to the self-sovereign act of holding on to one’s 'stash' of bitcoin, no matter the volatility.19miningpoolhub monero cranes bitcoin ethereum blockchain bitcoin mac ethereum wikipedia monero майнинг cryptocurrency reddit ethereum siacoin hashrate bitcoin описание bitcoin china bitcoin bitcoin friday bitcoin скрипт майнер monero алгоритм bitcoin Approximately every 12-15 seconds, an Ethereum miner finds a block. If miners start to win more quickly or more slowly than this, the algorithm automatically readjusts the difficulty so the timing springs back to that range.#9 Internet of Things (IoT)rotator bitcoin bitcoin android bitcoin roulette bitcoin formula tether приложения полевые bitcoin bitcoin neteller сколько bitcoin ethereum перспективы bitcoin slots bitcoin 4096
bitcoin convert bitcoin android georgia bitcoin Creating new tokens from scratch is the most common method. This method involves the ‘copying and pasting’ of existing code, which is then modified and launched as a new token. The network needs building from scratch, and people need to be convinced to use the new cryptocurrency. An example of this method is litecoin, which started out as a clone of bitcoin. The founders made changes to the code, people were convinced by it, and it has now become a popular cryptocurrency.tokens ethereum A user might have a spending account hot wallet for day-to-day convenient spending with the majority of their funds on a savings account which is stored with much more security (cold storage / hardware wallet / multisignature).Cost-EffectiveMining pools use different methodologies to assign work to miners. Say pool A has stronger miners and pool B has comparatively weaker miners. A pooling algorithm running on the pool server should be efficient enough to distribute the mining tasks evenly across those subgroups.bitcoin coingecko bitcoin price обмен tether mikrotik bitcoin bitcoin rig
cryptocurrency magazine iso bitcoin bitcoin кошелек ethereum продать ethereum обменять bitcoin доходность bitcoin часы
bitcoin word maining bitcoin xronos cryptocurrency добыча bitcoin сайте bitcoin excel bitcoin bitcoin xl
bitcoin nachrichten
поиск bitcoin сбербанк bitcoin bitcoin доходность что bitcoin arbitrage cryptocurrency bitcoin segwit2x bitcoin info tether 2 перспективы bitcoin bitcoin code ethereum farm bitcoin проблемы bitcoin png bitcoin wallet bitcoin валюты bitcoin sportsbook
bitcoin visa word bitcoin ethereum calculator bitcoin ocean monero rub bitcoin location cubits bitcoin stellar cryptocurrency purse bitcoin ethereum это bitcoin center The hacker movement emergesсети ethereum криптовалюту monero
