As of 2017 the whole cryptocurrencies market reached a peak of $176 billion, a mark that clearly tells us that they are here to stay, and Bitcoin is leading the table of rankings with a market capitalization of ~$70 billion. This alone is more than enough to motivate many to go after this new and rapidly growing market… but is it a good idea? Is it a better investment than gold?
These are normal questions that you may have, but worry not because this article will let you know the pros and cons of each one in a brief yet concise manner. Let’s get into it!
Rarity: A Decisive Factor
Rarity and scarcity are crucial factors. We all know that gold is rare but guess what? Bitcoin is even rarer!
But why? It is because there is a limited supply, which stands at 21 million Bitcoins, and right now we have around 16.5 million in circulation. That’s why when the supply suffers some kind of restriction and the demand increases, then as a result the price goes up significantly.
The concept is simple: the lower the supply and the higher the demand the more the price will increase. That’s something that makes BTC stand out and makes it superior to gold in terms of rarity and limited supply.
Exchanges: Which Has The Best Network?
If there is a place where gold gives BTC a beating then it is when we talk about exchanges. Even though the cryptocurrency scene has accomplished much, decentralized and proper centralized exchanges are still its major weak point.
Exchanges like Poloniex are not reliable at all, and the unique decentralized option is Etherdelta, which unfortunately only operates with Ethereum and its different assets (ex: CVC, PAY, TRST, OMG and TNT).
And yes, buying BTC can be a really big problem for many countries, for example Peru and all South American countries that cannot buy in sites like Coinbase.com. Thus, they have to rely on informal brokers that use to charge steep fees.
On the other hand gold has so many exchanges that there is no room for complaining.
Also, the transparency of global gold exchanges is evident and none doubts about it, which is something we cannot say about certain cryptocurrencies exchanges.
And finally, BTC exchanges are a constant target of hackers and we just need to remember the terrifying case of MT. GOX, which caused massive losses to investors and had a devastating effect in BTC’s price.
Value: Stability vs. Volatility
This is another major difference between both investments. On one hand you have that the gold will always have a demand for items like jewelry, there will always be buyers. And this value is protected better than BTC’s because it is considered to have a baseline value, which means the price will never dive below a certain point, because as a result it would hit the base demand.
As you can see the price of gold is very-well protected, which makes it a safer investment. On the other hand BTC doesn’t have this historical importance and industrial demand, which makes its value far more volatile.
Nonetheless, BTC’s volatility offers better rewards for those who dare to invest into it. Just take into account that trading is a completely different thing, because the safest way to get involved with BTC is to simply buy, hold and reinforce your position in the dips.
If you prefer something more stable and better protected against price crashes, then gold may be the best route for you. But on the other hand, if you are chasing the biggest profits, then BTC offers exactly what you are looking for.
Converting Your Investment Into Cash:
It is far easier to convert gold into cash, but this difference is disappearing with the pass of the time, because we have excellent projects like TenX (PAY) which aim to make it easy for investors to cash out their BTC holdings by providing them a debit card they can use in any ATM in any country around the world.
And not only that, but TenX goes beyond that and is working hard on supporting more cryptocurrencies and assets like CVC, OMG, etc. In a nutshell: it is connecting cryptocurrencies with the tangible world.
Now this analysis should be more than enough to see which kind of option is right for you. Just remember that any kind of investment is always subjected to a risk, especially when we talk about BTC.
Finally, it is always important for you to read more about each kind of investment, and a perfect website to know more about these topics is Market Review, where you will find more information and a further analysis on gold and bitcoin along with other crypto currencies and assets.