Bitcoin and Gold, have been popular as investment options, especially during the Covid-19 crisis, as they share many characteristics. With inflation hitting the new benchmarks, both the assets have shown their trajectories at newer record scores.
The past trends in investment markets present a factual reality that the decision-making of the investors is fundamentally based on every single market variable. Therefore, an alteration of any nature could either prompt the consumers to be an active participant or simply trigger a rapid tumbling over the charts.
One main difference between the two assets is the way investors can trade them and their availability. Bitcoin, as is the case with other cryptocurrencies, can be traded online in exchanges or online trading apps like bitcoincodedenmark.com or Bitcoin Prime, which provides real-time trading solutions.
The decisions pertaining to gold versus cryptocurrency as investment options are a complex arena that is subjective in nature. In other words, the real issue is to judge the proportion of the portfolio to be allocated for each of these assets.
Gold vs Bitcoin: Comparing to choose the most viable investment option
Analysts have identified the top three parameters for a good investment- transparency (and regulation), volatility, and liquidity. Let us read about these in detail to alleviate the dilemma.
Regulation and Transparency The current system for trading gold- marking, weighing, and tracking is all flawlessly regularized. There is barely a chance when a con person could steal or poach its authenticity. On the other hand, Bitcoin is encrypted and decentralized using complex algorithms. However, it still lacks the infrastructure and framework for regularized prophylactic response to any instance of fraud. Lawful implications of the crime committed over the blockchain are yet to be framed out, owing to its infant nature, and novel character.
Volatility This is quite a controversial characteristic of the investment markets. For some, it is a preferred measure of making profits and earnings margins, while for others, it creates an atmosphere of unreliability and insecurity.
Over the past few years, Bitcoin has shown price fluctuations in response to even the minutest of whims and buzz. For instance, Bitcoin rates tumbled down the markets with a single tweet by an influential personality this summer. This not only creates an atmosphere of haste, driving the markets technically illogically.
Talking about gold, though, one can easily make out about its stability in markets. Even though gold market trajectories seem to be quite like any other investment option, their value does not vary beyond a specific range. For an investor, who is seeking a long-term option, gold seems more likely.
Liquidity A liquid asset is one that can be easily cashed out at the owner’s will. Conventionally, gold as an asset has been reaping great return over investments owing to its growing prices over time. However, the real struggle lies when the person needs to physically take gold to the dealer table.
In the case of cryptocurrencies, the virtual nature provides an edge over this age-old practice, making it even more liquid. With crypto markets available every hour, this is the most preferred scene for almost all investors.
Portfolio diversification provides an opportunity to distribute your funds over a variety of assets. It is, therefore, quite a convincing reason that cryptocurrency should also be considered under the category, given its very promising advantages. Risk profiling could be a handy tool to decide between either or both for investing.
Hernaldo Turrillo is a writer and author specialised in innovation, AI, DLT, SMEs, trading, investing and new trends in technology and business. He has been working for ztudium group since 2017. He is the editor of openbusinesscouncil.org, tradersdna.com, hedgethink.com, and writes regularly for intelligenthq.com, socialmediacouncil.eu. Hernaldo was born in Spain and finally settled in London, United Kingdom, after a few years of personal growth. Hernaldo finished his Journalism bachelor degree in the University of Seville, Spain, and began working as reporter in the newspaper, Europa Sur, writing about Politics and Society. He also worked as community manager and marketing advisor in Los Barrios, Spain. Innovation, technology, politics and economy are his main interests, with special focus on new trends and ethical projects. He enjoys finding himself getting lost in words, explaining what he understands from the world and helping others. Besides a journalist, he is also a thinker and proactive in digital transformation strategies. Knowledge and ideas have no limits.