Bitcoin (BTC) is a digital currency created in 2009 that is decentralized and has no central bank. It is the most popular and widely known of a number of similar digital currencies that were created at around the same time. However, despite its rapid rise in prominence, it is still not the most valuable, with the best performing digital currency gold (XAU) having had a higher total market cap, and the most valuable one today being Ripple (XRP).
In the first public debate of its kind, Bitcoin’s developer community has sided with the cryptocurrency’s founder and CEO in a battle over the fair value of Bitcoin.
After the chaos of the recent stock market crash, it makes sense that people would want to keep their assets safe, and that’s exactly what gold (or gold mining stocks) is for. However, as the world financial markets continue to gravitate towards cryptocurrency, gold could soon lose its position as the go-to asset for investors.. Read more about bitcoin vs gold chart 2020 and let us know what you think.
The gold story will not be the same in the future. People are beginning to make significant parallels between bitcoin and gold now that it has taken over the globe. We’re witnessing gold with more faults than genuine characteristics as a result of this procedure. Gold’s characteristics or functions seem to have deteriorated during the past fifty years.
A digital cryptocurrency, such as bitcoin, on the other hand, is addressing some of the world’s most pressing financial issues while also offering a stronger inflation hedge. We are already witnessing indications that bitcoin will be the greatest or next largest ‘anti-fiat’ asset, outperforming all other asset classes.
Even in terms of a’store of value,’ gold lacks the instruments necessary to safeguard the results of your work and is prone to faults. You don’t have to worry about having a lot of storage space with bitcoin, and you don’t have to rely on banks.
As a result, bitcoin will surely become the biggest store of wealth ever created, surpassing gold sooner or later. Some people think that gold’s market capitalization will decline in the future, and one of the major reasons for this may be millennial purchasing habits. Gold as a store of wealth or a hedge against monetary inflation is not appealing to the younger generation.
Most of us love to look at ROIs and data points to make sound investment decisions. Well, here is one for you. The table given below represents the return on investments on gold, bitcoin, and S&P 500 (just to compare). Also, this does not include the year-on-year inflation we are witnessing. If we take inflation into account, the value of gold went down by 14-15% in the last year.
The most surprising aspect of gold’s depreciation is that it occurred at a time when the government began printing billions of dollars and cutting interest rates to zero. At the same time, bitcoin faced significant difficulties in the form of miners, FUD, and other issues related to the epidemic. However, it has increased by more than 250 percent (real-time).
Even some well-informed financial experts think gold can outlast this inflationary era, but history proves otherwise. Gold has failed twice in prior inflationary times, with the most recent failure occurring in the 1970s.
In terms of asset correlation with inflation during the past fifty years, gold has been at 0.16. It implies that gold has never been able to keep up with inflation rates for more than a half-century. All of this adds to the argument for bitcoin becoming more and more compelling. The younger generation is uninterested in gold investments. With more individuals embracing cryptocurrency, bitcoin will overtake gold as the world’s most valuable safe haven asset. We can’t say for sure that it will be the future of money, but it’s a fair bet that it will surpass gold.
Karthikeya Gutta, a crypto writer and freelance contributor for ItsBlockchain, was born and raised in India. With in-depth analysis and research, he covers different areas of the sector. His enthusiasm for blockchain and the crypto ecosystem stems from his belief that it has the potential to transform the world and benefit millions of people.
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Bitcoin’s value is up more than 1000% since it was created, but is it really a better investment than gold?. Read more about bitcoin price history and let us know what you think.
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