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 gambling bitcoin community
bitcoin бумажник
bitcoin video location bitcoin kraken bitcoin bitcoin base 50 bitcoin monero обменять ultimate bitcoin bitcoin система clame bitcoin bitcoin lottery nonce bitcoin bitcoin reserve putin bitcoin ethereum вики bitcoin server global bitcoin курс tether bitcoin maps tether addon x bitcoin bitcoin apple click bitcoin
bistler bitcoin bag bitcoin продажа bitcoin
nvidia bitcoin перспективы bitcoin cryptocurrency arbitrage bitcoin sha256 alpha bitcoin ethereum видеокарты security bitcoin bitcoin блокчейн cryptocurrency bitcoin прогноз bitcoin комбайн bitcoin journal bitcoin black trinity bitcoin bitcoin it forex bitcoin mmm bitcoin bitcoin info preev bitcoin ethereum node A typical currency has been mainly based on silver or gold. Hypothetically, it is known that a dollar given over at the bank will give you gold as an exchange (this isn’t practiced real life though). However, bitcoin is not gold based but based on mathematics.rigname ethereum cap bitcoin bitcoin conf bitcoin icon вывод ethereum bitcoin dogecoin The approach may seem highly inefficient at first glance, because it needs to store the entire state with each block, but in reality efficiency should be comparable to that of Bitcoin. The reason is that the state is stored in the tree structure, and after every block only a small part of the tree needs to be changed. Thus, in general, between two adjacent blocks the vast majority of the tree should be the same, and therefore the data can be stored once and referenced twice using pointers (ie. hashes of subtrees). A special kind of tree known as a 'Patricia tree' is used to accomplish this, including a modification to the Merkle tree concept that allows for nodes to be inserted and deleted, and not just changed, efficiently. Additionally, because all of the state information is part of the last block, there is no need to store the entire blockchain history - a strategy which, if it could be applied to Bitcoin, can be calculated to provide 5-20x savings in space.bitcoin cny bitcoin maker cryptocurrency charts bitcoin lion cubits bitcoin bitcoin халява bitcoin реклама today bitcoin проверить bitcoin ethereum foundation ethereum сайт акции ethereum There are many Bitcoin supporters who believe that digital currency is the future. Many of those who endorse Bitcoin believe that it facilitates a much faster, low-fee payment system for transactions across the globe. Although it is not backed by any government or central bank, bitcoin can be exchanged for traditional currencies; in fact, its exchange rate against the dollar attracts potential investors and traders interested in currency plays. Indeed, one of the primary reasons for the growth of digital currencies like Bitcoin is that they can act as an alternative to national fiat money and traditional commodities like gold.bitcoin qr заработок ethereum 99 bitcoin серфинг bitcoin
bitcoin green
прогноз bitcoin cryptocurrency dash миксеры bitcoin bitcoin home nova bitcoin nxt cryptocurrency шахта bitcoin bitcoin community future bitcoin wallpaper bitcoin bitcoin security bitcoin de
краны monero
магазин bitcoin bitcoin проект
ubuntu ethereum
nova bitcoin анонимность bitcoin monero hardware bitcoin debian tether курс ethereum курсы bitcoin cfd ethereum coin
новости ethereum bitcoin keys bitcoin wallpaper pos bitcoin bitcoin blog ethereum bitcoin flash bitcoin bitcoin x цена ethereum frog bitcoin pay bitcoin bitcoin scam bitcoin red bitcoin краны карты bitcoin и bitcoin
hub bitcoin air bitcoin ethereum buy cryptocurrency capitalization bitcoin de bitcoin hyip
dwarfpool monero carding bitcoin tether coin bitcoin 2x elena bitcoin 3d bitcoin bitcoin шахта But if you joined a mining pool with 50,000 other people, every time your pool won, you would get you to share based on your 1 ticket. This is the same with Litecoin mining, where your share of rewards are based on how much power you provide.Smart contract code: Ethereum stores smart contracts, which describe the rules that need to be met for money to be unlocked and transferred.bitcoin adress They saw a potential solution emerging in cryptographic systems to escape surveillance and control. Tim May, Intel’s Assistant chief scientist by day, wrote the Crypto-Anarchist Manifesto in 1992:автомат bitcoin tether wifi usd bitcoin ethereum com ethereum пулы bitcoin генератор bitcoin games monero кран vpn bitcoin теханализ bitcoin plus500 bitcoin bitcoin расшифровка wallet tether bitcoin froggy
txid bitcoin ethereum алгоритм пополнить bitcoin rotator bitcoin ethereum addresses monero майнить bitcoin ticker scrypt bitcoin kraken bitcoin simple bitcoin bitcoin пицца okpay bitcoin суть bitcoin free ethereum create bitcoin captcha bitcoin ethereum info bitcoin доходность майнинга bitcoin ethereum io bitcoin trojan bitcoin sportsbook bitcoin монет torrent bitcoin
bitcoin china развод bitcoin today bitcoin
cryptocurrency calculator
технология bitcoin bitcoin euro tp tether dog bitcoin ethereum картинки bitcoin client equihash bitcoin monero майнинг carding bitcoin программа tether fire bitcoin json bitcoin cz bitcoin moon bitcoin 2x bitcoin автомат bitcoin
сложность monero бесплатно ethereum bitcoin биржа bitcoin mainer
bitcoin 100
продам bitcoin bitcoin автомат unconfirmed monero bitcoin lion reverse tether графики bitcoin обновление ethereum bistler bitcoin polkadot cadaver satoshi bitcoin заработка bitcoin bitcoin mac bitcoin location bitcoin cms tether gps bitcoin fast monero майнер cryptocurrency charts torrent bitcoin bitcoin dynamics bitcoin redex cryptocurrency index tether криптовалюта bitcoin crypto ethereum проблемы bitcoin отзывы king bitcoin 0 bitcoin api bitcoin freeman bitcoin рубли bitcoin
bitcoin king bitcoin trading ethereum телеграмм ethereum продать ethereum project деньги bitcoin copay bitcoin trade bitcoin bitcoin download Framing the problem as a phenomenon:ultimate bitcoin total cryptocurrency You can readily send money anywhere allowing the recipient to receive a few minutes later, by the time the network of bitcoin processes the payment.bitcoin magazin ethereum хешрейт bitcoin вложения monero кран mmgp bitcoin пузырь bitcoin bitcoin like
bitcoin clicks hosting bitcoin ethereum news криптовалюта ethereum bitcoin golden 1080 ethereum Someone who needs the easy access of a web wallet should download a lightweight wallet like Electrum.bitcoin rotator testnet bitcoin
bitcoin казахстан Once John sends the funds, they are then sent to the Litecoin blockchain.monero pools
bitcoin loto bitcoin transaction дешевеет bitcoin
bitcoin icons coinbase ethereum
bitcoin bear multisig bitcoin
bitcoin hub bitcoin блокчейн pool bitcoin bitcoin iso credit bitcoin Fancy some gold? Sharps Pixley, APMEX and JM Bullion will take bitcoin off your hands in exchange for bullion.community bitcoin
Because they are removed from the Internet, at one point paper wallets were considered to be more secure than other forms of cryptocurrency storage.poloniex bitcoin bitcoin magazin bitcoin auto bitcoin tm bitcoin rt plasma ethereum the ethereum bitcoin видео local ethereum pay bitcoin field bitcoin dollar bitcoin bitcoin майнер хардфорк bitcoin bitcoin click ethereum contracts bitcoin new bitcoin earnings 4. Mining SoftwareTurning energy into hashes crystallizes valuebitcoin 0
bitcoin переводчик монета ethereum
doge bitcoin delphi bitcoin bitcoin buying bitcoin блок
перспектива bitcoin баланс bitcoin cryptocurrency law wei ethereum ethereum coin
equihash bitcoin pos bitcoin
bitcoin заработок A Simple Example to get Blockchain Explained Better:покупка ethereum connect bitcoin bitcoin комментарии алгоритм monero tracker bitcoin invest bitcoin birds bitcoin ethereum вывод in bitcoin wiki bitcoin instant bitcoin accepts bitcoin bitcoin 2018 bitcoin компьютер bazar bitcoin gadget bitcoin фарминг bitcoin вклады bitcoin bitcoin программа win bitcoin bitcoin play bitcoin greenaddress flappy bitcoin кран ethereum wallpaper bitcoin spots cryptocurrency bitcoin puzzle lucky bitcoin bitcoin ротатор accepts bitcoin ethereum алгоритм доходность ethereum direct bitcoin ethereum доходность bitcoin check spots cryptocurrency
bitcoin 0 ферма ethereum bitcoin multisig bitcoin uk fast bitcoin click bitcoin bitcoin elena 5 bitcoin raspberry bitcoin bitcoin funding ethereum инвестинг minergate monero
cranes bitcoin
If Bitcoin reaches a six figure price level with 19 million coins in total, that would put its market cap at just under $2 trillion or more, above the largest mega-cap companies in the world today. It would, however, still be a small fraction of 1% of global net worth, and about a fifth of gold’s estimated market capitalization (roughly $10 trillion, back-of-the-envelope), so it’s not unfathomable for Bitcoin to eventually reach that height if there is enough sustained demand for it. During the late-2017 cryptocurrency mania, the total market capitalization of the cryptocurrency space reached over $800 billion, although as previously mentioned, Bitcoin’s share of that briefly fell to under 40% of the asset class, so it peaked at just over $300 billion.bitcoin datadir monero пул ethereum farm bitcoin blue bitcoin multiplier bitcoin 50 99 bitcoin бот bitcoin bitcoin rpg bitcoin машины
vps bitcoin moneybox bitcoin заработать monero bitcoin халява simplewallet monero википедия ethereum ann ethereum server bitcoin падение bitcoin bitcoin evolution bitcoin start ethereum gas bitcoin проблемы monero coin bitcoin презентация bitcoin machine bitcoin cnbc nonce bitcoin bitcoin programming
bitcoin видеокарты bitcoin best проект bitcoin ethereum cryptocurrency ethereum chart счет bitcoin рубли bitcoin bitcoin etherium
bitcoin zebra bitcoin компьютер bitcoin nedir bitcoin reddit darkcoin bitcoin
bitcoin cloud bitcoin symbol flypool ethereum bitcoin qiwi настройка monero логотип bitcoin
крах bitcoin bitcoin депозит bitcoin banking monero криптовалюта wired tether hit bitcoin bitcoin weekend moneybox bitcoin
spots cryptocurrency bitcoin metal ethereum видеокарты blogspot bitcoin bitcoin 4 eos cryptocurrency bitcoin суть bitcoin casascius blake bitcoin wmz bitcoin today bitcoin bitcoin net tether майнить bitcoin stellar bitcoin convert tether приложения Mycelium is an open-source and mobile-only Bitcoin wallet. Mycelium currently only supports Bitcoin. In some ways, Mycelium is quite similar to the Electrum wallet with some of the differences being that it is mobile only, has a more refreshed user interface than Electrum, and also has a built-in exchange.monero price bitcoin weekly
bitcoin fees сбербанк bitcoin polkadot ico bip bitcoin bitcoin proxy ethereum io loco bitcoin billionaire bitcoin prune bitcoin bitcoin like bitcoin 1000 ютуб bitcoin ethereum скачать доходность ethereum darkcoin bitcoin rx560 monero cryptocurrency tech фото ethereum курс ethereum Main article: Darknet marketbitcoin rus monero spelunker The EVM also has storage. Unlike memory, storage is non-volatile and is maintained as part of the system state. The EVM stores program code separately, in a virtual ROM that can only be accessed via special instructions. In this way, the EVM differs from the typical von Neumann architecture, in which program code is stored in memory or storage.bitcoin foundation ccminer monero bitcoin reindex ethereum dark обновление ethereum bitcoin халява видео bitcoin bitcoin exchanges доходность ethereum
monero пул ethereum котировки обновление ethereum ad bitcoin bitcoin wmx bitcoin trend bitcoin картинки кошелек tether рубли bitcoin форекс bitcoin бутерин ethereum программа tether bonus bitcoin Some investments are insured through the Securities Investor Protection Corporation. Normal bank accounts are insured through the Federal Deposit Insurance Corporation (FDIC) up to a certain amount depending on the jurisdiction. Generally speaking, Bitcoin exchanges and Bitcoin accounts are not insured by any type of federal or government program. In 2019, prime dealer and trading platform SFOX announced it would be able to provide Bitcoin investors with FDIC insurance, but only for the portion of transactions involving cash.12bitcoin habr bitcointalk monero love bitcoin monero btc
bitcoin форки bitcoin loan портал bitcoin оплата bitcoin
importprivkey bitcoin bitcoin информация ethereum supernova wordpress bitcoin обновление ethereum bitcoin инструкция locate bitcoin accepts bitcoin adbc bitcoin bitcoin обменники cryptocurrency это arbitrage bitcoin
avatrade bitcoin sec bitcoin monero miner A Dapp has its back-end code (smart contract) which runs on a decentralized peer-to-peer networkвзлом bitcoin робот bitcoin акции bitcoin rush bitcoin перевести bitcoin отследить bitcoin moto bitcoin программа bitcoin
decred cryptocurrency bitcoin traffic bitcoin mt4 dapps ethereum bitcoin javascript fpga ethereum падение ethereum bitcoin серфинг падение ethereum ethereum faucet взлом bitcoin cranes bitcoin bitcoin mmgp