It’s a question that has been hotly debated for years, with some economists and investors believing that Crypto is the future of commerce. A report revealed that crypto-currencies are now too big to ignore. Despite this, there are many arguments about why gold might be a better option for an investment over crypto-currencies. The following will explore these arguments and summarize how we expect each one to play out long-term.
Top Reasons Why Crypto Is Better Than Gold
Crypto has a lower interest rate (0%), and investors can earn more money by creating, selling, or buying new crypto-currencies. There will only ever be 21 million bitcoins in the world, making it a finite resource that is controllable. The supply is limited, and demand is growing at an exponential rate. Cryptocurrency can’t be counterfeited or debased by a government, and central banks cannot manipulate its value. The security of crypto-currencies is much greater than gold because of how sophisticated bitcoin’s encryption technology is. The transaction fees for sending money on the bitcoin network are nominal.
Since bitcoin’s inception in 2009, this network has processed over 12 million transactions for less than $30 each, compared to an average $15 transaction fee on a bitcoin system robot for international wire transfers. However, gold is too slow and costly to use as a medium of exchange, whereas digital currency can pay securely and instantly. In addition, gold’s market cap ($6 trillion) is more significant than Crypto ($600 billion).
Historically speaking, crypto-currencies have performed better than gold in terms of growth rates, given their recent price dips –in 2015, bitcoin grew by 14.8%, while Ethereum doubled in price by just 11.7%. In 2017, bitcoin increased by almost 1,300%, and Ethereum grew by an astonishing 8,500%.
Gold’s Top Reasons Why It’s Better Than Crypto
Gold has been used for thousands of years as a means of real money. Gold is resistant to the corrosive effects of time. It does not decay, rust, or corrode. As a result, it has a high value relative to its volume. Gold is universally recognized as valuable, and there are relatively few places where you cannot use it. To destroy gold would take a great deal of effort, and you can do so without leaving a trace –it possesses an inherent value that can’t be destroyed or fabricated.
Gold may be more accessible to individuals as it is easier to obtain. Gold has long been a currency in our history, thus allowing users to obtain and sell gold without requiring institutions or intermediaries. In addition, physical gold is highly liquid, so there would not be delays in converting fiat (government-backed) money into gold or vice versa. This ease of access makes gold more desirable and accessible than crypto-currencies.
Benefits Accessed While Using BTC As An Investment
While the benefits of gold would be harder to access, a few things can be done with bitcoin investment. First, you can buy and sell bitcoin at any time. Second, Bitcoin holders can use it to trade other assets or convert them into fiat (government-backed) money through crypto exchanges. Third, if you want to hold your assets in gold, you’ll need to pay for storage fees which could cost $10-$20 daily. Finally, if the bitcoin price drops, the individual can purchase more bitcoin by selling their gold. It is easier to find gold in most countries worldwide than to find bitcoin.
Crypto has security flaws, and currently, there is practically no protection for investors due to not being able to invest in anything tangible or tangible-like. In addition, Crypto are highly volatile (and have been known to make drastic changes in value quickly) and are vulnerable to economic downturns.
As seen above, it seems that Crypto is a better choice as an investment over gold. The future of cryptocurrency is still uncertain, but bitcoin has gained roughly 75% in value since last year alone. Over the next few years, this number will likely grow exponentially due to its rapid adoption in emerging markets and the fact that it may become a part of everyday life.
Finally, you’re able to take advantage of some insurance products for storing your bitcoin safely and soundly.