Long before Bitcoin reached the price of gold, the two commodities have been compared, and analysed side by side, in order to determine which would make a better long-term investment for anyone with enough capital to risk.
As the two commodities are currently situated at approximately the same price, determining the right choice is an interesting mind exercise. If we were to put aside bitcoin’s well-known scalability debate, alongside with its volatility, which would make up a better choice in the long run? There are clearly advantages and disadvantages to both, as while bitcoin is the newer, and more utile choice, especially since we’re living in the digital era, gold on the other side of the spectrum, has, what can be named, an indisputable track record, and has been used as a means of measuring value by humans for thousands of years.
The advantages of Bitcoin
Regardless of this aspect, one of the main advantages that bitcoin has over gold is the fact that it has a fixed and transparent supply level, whereas nobody can truly predict the gold supply schedule over the next few years, as there’s no way of creating an exponential curve in this direction, while also keeping in mind gold’s inflationary rate, which isn’t really set up to preserve value, as compared to bitcoin. Apart from this, it is also worth pointing out that the utility of bitcoin, which can be used as an actual currency for purchasing and selling goods and services, is considerably higher when compared to that of gold. Apart from this aspect, the usefulness, growing infrastructure, popularity and importance of the digital currency, will continue its growth, whereas gold’s may be hindered by a growing lack of interest.
The advantages of gold
One of the main advantages that gold has over bitcoin is its reliability and trust, as the commodity has been used by human civilizations for thousands of years, to conduct exchanges, but also measure and store monetary value. Together with this, gold has also been proven to be of use, even when governments decided to either outlaw, or restrict its usage. Therefore, it represents an important part of the economy of organized societies in history, and in our current era.
Another benefit associated with gold is the fact that it is immune to technological disruption. While gold can theoretically be purchased online, or invested in, without holding actual gold, the grams being purchased over the internet exist physically, unlike bitcoin, which more or less, is a simple string of numbers, and cannot be handheld, thus granting gold an elemental advantage.
The better choice
When it comes down to investing, putting all of your eggs in one basket is a rookie mistake that is bound to lead to losses. Therefore, consider diversifying your portfolio, to include both gold and bitcoin, alongside with other assets that can maintain, or grow their value over time.
Based on everything that has been outlined so far, which do you see as better, gold or bitcoin? Let us know your thoughts in the comment section below.