Whenever someone mentions investment, every individual has their own range of associations that this term awakes.
Such a reaction is, in fact, understandable since there is an endless number of things to purchase with your money.
While certain people rummage through the housing market, someone else wonders how to buy stellar lumens with debit or credit card.
The diversity of options is truly mesmerizing, and the most common objects of investment today are:
- Real estate;
- Company shares;
- Bank deposits;
- Art pieces;
- Precious metals;
- Cryptocurrencies.
The list mentioned above contains newly emerged objects along with the traditional assets that are still topical in the 21st century.
Is it possible to say that they compete with each other? The situation looks more like co-existence rather than competition. Still, knowing the difference, pros, and cons of every option is beneficial.
Indeed, contributing money in assets usually goes side by side with risk, even when the danger is minimal. Hence, those who possess free costs rarely act without a preliminary market analysis.
In the case of investment, responsibility equals discovering current trends and economic prospects. The tastes of investors shift from time to time under the present circumstances, which often are unexpected.
As long as you have substantial experience or just a gut instinct, deciding where to put your costs is non-problematic.
Conversely, if you have doubts, the best way to get rid of them is to educate yourself. Hopefully, this article helps you in gaining helpful knowledge on investment!
Post Contents
Why Even Compare Bitcoin and Gold?
In recent years cryptocurrencies stay at the center of attention of media and general publicity. The initial appearance of Bitcoin shook the world, where people used to have tangible assets in possession.
Truly, the completely new type of money awoke the interest of curious people. In the other corner of the ring, there is gold.
Unlike cryptocurrencies, this asset has existed since the dawn of humanity and plays an essential role to this day.
Both investment objects are worth taking into consideration. Yet, where to put your money to sleep sound?
Let’s compare cryptocurrency and precious metal using several criteria!
How Rare Is the Object of Investment?
Usually, the rarity of an object has a direct correlation with its value. In other words, the less of a resource there is, the more expensive it becomes on a global market.
Obviously, gold belongs to the group of non-renewable resources, like: oil, coal, natural gas, etc.
Even though the estimations are approximate, scientists believe that most of the gold on our planet is already above the ground, while about fifty-five thousand tons remain to discover.
Some might rightfully wonder, why does the price for this precious metal stay high? A plentiful of gold that people find remain in their closets instead of circulating on the market.
Because of this, the shiny blocks are as valuable now as they were in Ancient Egypt, for instance.
On the other side, there is a worldwide sensation, Bitcoin itself. At first, it looks incomparable to the all-time leader of the financial market, which is gold.
Nonetheless, the value of both of the objects changes according to the same principle. Since the creator or creators made sure that the number of Bitcoins is limited, it becomes a non-renewable resource to a certain extent.
Moreover, the cryptocurrency might even compete with gold in terms of exclusivity. Markedly, the last token of twenty-one million of them can appear in 2140.
Logically speaking, it would be impossible to come up with more advanced mining machines to retrieve more Bitcoins than that number.
Is the Asset Stable?
As it was mentioned before, gold had a pretty much stable price throughout its existence, which is several thousand years. What is more, this metal became the standard for all currencies because of its stability.
At all times, it signaled high maintenance and success. Were you a medieval merchant, or a miner in the late 1800’s, a handful of yellow coins was an actual fortune. Even nowadays, the world-leading currencies use gold as a backup for their worth.
What about Bitcoin? Although it helped multiple people reach their financial peak, the asset barely associates with stability.
Bitcoin is quite the opposite of gold in terms of volatility. Unfortunately, too many factors have a tremendous impact on the current price of tokens.
Did a famous person criticize Bitcoin publicly? The price experiences a sharp slump. Did a country make cryptocurrency legal? Wait for an upsurge in the value.
Without a doubt, there will be zero undiscovered tokens at some point in time, which will positively affect Bitcoin price.
Yet, the currency might expect countless ups and downs before getting to that moment, so gold wins this round.
Is the Asset Profitable?
Undeniably, the primary purpose of investing is getting as high profits as possible. You weigh risks and possible outcomes to get your money working instead of staying in the drawer.
First, let us discuss the situation with gold.
While this kind of asset carries multiple advantages like stability, it has certain drawbacks. One of them is relatively low profits.
In order to get a substantial reward, an investor must wait at least 10-15 years! At least, a person knows that their costs are safe from volatility.
At the same time, Bitcoin is known for its ability to make somebody rich overnight. Whether the success is one time or it alternates with drastic slumps, clever management does wonders!
Overall, the option with cryptocurrency suits people who prefer short-term investment and stay calm even during sudden changes.
Putting money in Bitcoin gives equal chances of losing assets in a split second and winning the game.
Final words
All things considered, the best thing to say is that every person has their perfect investment strategy and the most suitable investment object.
Both Bitcoin and gold have their pluses and drawbacks, but peculiarities are what make them so unique. Hence, everybody can choose where to invest according to their preferences!
