The debate between gold and Bitcoin has been going on for a very long time. Some investors call Bitcoin “digital gold” and some call it trash. So, who is right?
Gold is natures currency, for centuries and millennia people, cities and countries have been using it to buy and sell goods and services, this means that gold will almost always remain valuable to people because of the value it naturally has.
Now, recently Bitcoin has gotten the title of “Digital Gold” which is a very fair name to give it. It is the best performing, and most valuable crypto and in the short time that it has existed so far, it has become one of the most valuable assets in the world, and more than likely it will reach top 10 in the coming years. So, yes calling it digital gold is 100% a good name to give it.
When you compare gold and bitcoin, you will see Gold obviously has the higher market cap, more trading volume, and of course, more use. People create jewellery out of gold, gold is used in motherboards, and there are many other applications for it. Unfortunately for Bitcoin, it’s current biggest application is seamless transactions. You can send Bitcoin instantly, anywhere in the world to anyone. That beats gold, which can’t be transferred as easily.
While one application is not enough to make it beat gold, the application is certainly good enough to put it up there for debate.
So, realistically, it will never beat gold, because no matter what happens, the world will always default back to gold. This answers the question quite simply, gold is better… in a way.
As always, the best comes to those who diversify, so instead of asking, should I buy “Digital Gold” or real gold? Ask, how should you buy both. This puts you in a much better situation, as diversifying into both is a much better option, I would definitely say that having a bigger percentage (over 50%) in gold would be best if you are looking for a safeguard. But, if your goal is safety and big returns, then doing 50/50 can work as well.
Putting more than 50% in Bitcoin can come with risks as it is very volatile compared to gold, and not everyone can stomach such volatility.
Always remember this; “Never put all your eggs in one basket, because if it drops, you’ll have none left.”
(Just my opinion, not financial advice)