Investing and Saving are one of the many lessons that the pandemic has taught us in order to stay financially stable. But, what nobody talks about is the asset in which to invest our capital. Stay hooked with this article to know which is the better investment: Gold or The Digital Gold ?
Both the investments are worth investing your time in but are they worth investing your money ?
Gold is a precious metal, an asset which is considered to be one of the safest investments. It is used as money for exchange, a store of value and valuable jewellery. Indians and gold are inseparable. But, in this era of digital money and cryptocurrency, does Gold satisfy the requisites of being a suitable investment ?
On the other hand, Bitcoin is a virtual currency facilitating peer-to-peer exchange and decentralised ecosystem. The crypto coin is an alternative for the traditional currency and is currently ruling the market with its tremendous popularity as the dominant cryptocurrency. Bitcoin is often coined as “Digital Gold”, but is it better than Gold as an investment ?
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Is Gold the Safer Investment?
Gold has been around in the market for a long time. Even though Gold no longer backs major worldwide currencies (Like U.S. Dollar), it still hasn’t lost its importance in society. Throughout the entire history, Gold has backed up the national currency and is valued and passed down from generations.
Gold has always been an important part of a diversified investment portfolio. It has proved to be valuable and useful for more than over a century. Even though gold faces volatility issues, it is only short-termed. Gold has always maintained its value over the long term.
Through stock markets one can invest in Gold coins or the companies mining the Gold. Investment in Gold can be done easily through the SPDR’s Gold Shares ETF. Investors can invest in gold mining companies like Barrick Gold, Newmont mining, Anglogold Ashanti and Goldcorp.
Does Bitcoin offer better returns ?
Bitcoin is a decentralised cryptocurrency launched in 2009. It is an alternative to traditional currency and a step towards the digital world. It runs on the blockchain system and aims at providing secure transactions. Bitcoin is an intriguing and presiding cryptocurrency that has been currently ruling the finance market.
Unlike the stock market, Bitcoin can be traded 24*7 and has no legal restrictions. It is also popular and heavily in demand due to its limited supply. This means the value of BTC will keep increasing with time and reduced supply. Bitcoin is a currency for the people, made by the people and its market value is also decided by the people.
The best way to acquire BTC is through crypto exchange platforms like WazirX, Binance, CoinDCX, CoinSwitch, etc. One can also acquire BTC through peer-to-peer methods or through mining it.
Comparison : Bitcoin (Digital Gold) vs Gold
| BASIS | BITCOIN | GOLD |
| SUPPLY | 21 million BTC | Unlimited |
| SYSTEM CONTROL | Decntralised system |
Centralised system controlled by Government
|
| SECURITY | Secured by Blockchain system |
Secured by Government laws and legal boundries.
|
| LIQUIDITY | Fiat currency can be exchanged for BTC |
Fiat currency can be exchanged for Gold
|
| ACCESSIBILITY | Bitcoin is easily accessible |
Gold can be accessed through purchase or investment.
|
| VOLATILTY | Highly volatile | Not very Volatile |
| RECOGNITION | Bitcoin is still a new concept for most people |
Gold is the most recognized asset
|
| USES | Bitcoin can be used as an alternative for currency |
Gold has several uses in the market from being an asset, currency, jewellary, etc.
|
| INFLATION | No clear history with inflation crisis |
Gold serves as a badge against inflation
|
| MARKET CAP | $366 Billion USD | $9 Trillion USD |
Bitcoin vs Gold : 10 year Price comparison
| YEAR | PRICE OF GOLD/GRAMS |
BITCOIN PRICE
|
| September 2011 | $52.82 | $4.03 |
| September 2012 | $56.67 | $12.89 |
| September 2013 | $43.11 | $133 |
| September 2014 | $39.14 | $375.47 |
| September 2015 | $36.40 | $239.14 |
| September 2016 | $43.04 | $605.69 |
| September 2017 | $41.26 | $4174.73 |
| September 2018 | $38.40 | $6625.56 |
| September 2019 | $48.94 | $8104.19 |
| September 2020 | $60.23 | $10775.27 |
| September 2021 | $58.25 | $46662.36 |
| September 2022 | $63.4 | $19,140.40 |
Bitcoin vs Gold : 10 years annual return
| YEAR | GOLD (Rate of return) |
Bitcoin (annual retuns)
|
| 2011 | 8.90% | 1473% |
| 2012 | 8.30% | 186% |
| 2013 | -27.30% | 5507% |
| 2014 | 0.10% | -56% |
| 2015 | -12.10% | 33% |
| 2016 | 8.10% | 125% |
| 2017 | 12.70% | 1325% |
| 2018 | -0.90% | -72% |
| 2019 | 18.40% | 88% |
| 2020 | 24.60% | 302% |
| 2021 | -7.6% | 90% |
| 2022 | 6% | -40.06% |
Conclusion: Which is a better investment in 2022?
Investment is a very subjective decision and should be based on the strata of different individuals. While Gold and Bitcoin both have been doing excellent in the market, we are in the favour of investing in BTC.
Bitcoin is an intriguing currency that has changed the face of digital finance. It has not only grown excessively in the past decade but has also time and again proven it’s worth by surviving and hailing in the money market. It has gained a market cap of $1 trillion alone in 2021 and is still continuing with the bullish nature.
Gold might be giving good returns now but Bitcoin is the future of money. It is always safe and sound to have a cryptocurrency in your portfolio, since they are currently running the market. And, it is very possible that BTC might soon cross the market cap of Gold and become the most adopted cryptocurrency. Furthermore, it is updating, and gaining more value with each passing day. Don’t be too late and invest in BTC now.
DISCLAIMER : The investment decision should be personal and based on detailed research. Our opinion is not investment advice.
