Bitcoin vs gold – Which investment commodity is better?

In recent years, great changes have taken place in the investment environment. Currently, besides the most popular traditional investments, stocks and bonds, there are two popular choices-gold and bitcoin.

The stock market and bond market have been volatile. After the bull market continues to grow, recent investors are more inclined to look for more stable and safe investment methods. Gold is the main hedge against currency depreciation and fluctuations. As miners cannot create more gold, gold performs well during inflation.

However, new alternatives are increasingly challenging traditional investment methods. Investment experts believe that gold is losing its elegance because of a new financial investment method-Bitcoin, which is also called digital gold.

The demand for gold m has dropped sharply in 2021. This year it has fallen by about 9%, which is nearly 15% lower than the highest record of more than $2,000 last year. At the same time, the skyrocketing speed of Bitcoin is staggering. At present, the US dollar exchange rate has rapidly risen to more than US$50,000 per coin, and there is even huge investment support from large companies such as Morgan Stanley and Microsoft Strategy. If we believe in the opinions of trading experts, Bitcoin will surpass itself within a few years and bring huge price increases. The same is true for the performance of global financial powers.

As Bitcoin continues to rise sharply, investors are evaluating digital currencies and gold as better investment preservation methods, and people have been arguing about this.

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Bitcoin vs Gold

Gold has always been a reliable investment for maintaining long-term wealth. It is a valuable asset in consumer goods, and it is very scarce. Unlike fiat currencies, gold has a history of use several years ago under different market conditions.

On the other hand, Bitcoin is a digital currency that has only existed for more than ten years, and it is an attractive asset for investors. Even in times of inflation, gold is the best. But in terms of high yields, Bitcoin is the first one to do my part. It was launched on the market in 2008 at a price of $0.08. In 2021, it grew to a high price of $60,000 per bitcoin, and gained widespread recognition in just a few years. It is registered on the blockchain and has a decentralized nature, so it can prevent hackers and smuggling.

One of the biggest reasons why traditional investors are uncertain whether to invest in Bitcoin is because of the high volatility of Bitcoin. They tend to seek hedge assets against inflation, and Bitcoin does not play this role. On the other hand, gold has always been chosen by people as a safe asset. Even today, the global market value of gold is still as high as 11 trillion U.S. dollars, and the market value of digital currency as a minority group is as high as two trillion U.S. dollars.

However, Bitcoin is taking small steps to prevent inflation. For example, Paul Tudor Jones, a well-known hedge fund trader, used his $22 billion BVI fund as an inflation hedge to buy Bitcoin in May.

Both gold and bitcoin are alternative currencies. The difference is that the former is the currency of the past and the latter is the currency of the future. They can also facilitate cross-border transactions. Although the volatility of gold is one-fifth of Bitcoin, Bitcoin as a store of value is 100 times higher than gold.

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Conclusion

Investing in gold and bitcoin at the same time is based on the same reason. Therefore, one should not value one but the other.

Bitcoin and gold are both basic products in investment. Some institutions believe that gold is irreplaceable, while other millionaires believe that Bitcoin is the perfect use case for the modern economy.

However, the debate about investing in bitcoin or gold is not necessarily a choice, because holding different asset portfolios can bring healthy diversification, and therefore can improve the performance of the overall investment portfolio. Owning gold and Bitcoin is one of the best ways to invest because the prices of these two assets are not only independent of each other, but also independent of other assets. In view of the overall market decline, their price movements are not consistent, so the total value of your portfolio will not decrease significantly.

We recommend that you keep your investment portfolio balanced and also invest in future currency technologies such as gold and Bitcoin. This is much better than putting all the eggs in one basket. In a period of rising consumer prices, investors in both assets may become winners.

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