If you had to choose between investing in Bitcoin and Gold, which would you choose? Or, maybe there is even a better option! This article covers both major assets’ pros and cons and introduces how the two intersect to create gold-backed cryptocurrencies such as Goldcoin.com.
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Pros and Cons of Bitcoin
Bitcoin has become one of the best-performing assets of all time, but there are still some caveats to this type of investment. As the first cryptocurrency to become mainstream, Bitcoin enjoys the first-mover status, and its Network continues to grow rapidly as institutional investors hop on board. But you won’t always hear about the risks – that is because Bitcoin is largely an unregulated asset that has no company or government behind it. Let’s go over the pros and cons to help bring a better understanding one how investing in Bitcoin works:
Pros
- Bitcoin is one of the most “uncorrelated” assets available, meaning when stock markets swing (in either direction), BTC price does not always follow.
- Bitcoin rests on the world’s largest and most secure computer network. It is both extremely difficult to hack and also economically unfeasible to do so.
- Bitcoin and other cryptocurrencies are attractive to the millennial investor who favors a modern approach to investing.
Cons
- While Bitcoin is an uncorrelated asset, its price is highly volatile. 30% price swings are not uncommon.
- Once you own Bitcoin in your wallet, it is YOU that must keep it secure. There is no customer service chat line to call if you lose the seed phrase to your Bitcoin.
- Bitcoin is complicated. It’s built using highly complex, cutting-edge technology that many people have trouble understanding.
Pros and Cons of Gold
Gold has been traded, used, bought, and sold by humanity for thousands of years. It not only has value as a safe haven investment, but it also has real-world use in technology manufacturing and many other business sectors. But does investing in physical gold make sense in a digital world? Let’s explore the pros and cons of the gold investment:
Pros
- One of gold’s most advantageous properties is its liquidity. It is second only to USD cash in this respect. You can walk downtown in almost every town across the globe and sell your gold in a pawn shop. Not only that, there is a multitude of online markets for buying and trading gold.
- Gold’s usefulness is another great reason for investing. You’ll find gold in many industries, from jewelry and electronics to aerospace and dentistry. So gold not only has value as an investment but also in the physical world, adding to its overall value.
- Gold is an inversely correlated asset, meaning when stock markets crash, gold is often soaring. This makes it a great hedge for investors looking for portfolio protection during times of market upsets and political upheavals.
Cons
- Unless you are a seasoned collector, it may be difficult to ascertain the value of gold and its authenticity. Everyday investors must rely on third-party dealers of physical gold, who charge premium prices for buying and liquidating.
- The storage of gold is another issue that investors must take on. They either find safe storage for their coins and bars or rely on a 3rd party company to store the gold for them.
- In the digital age, millennials and other younger generations may view gold as old school, preferring high-tech options like Bitcoin and other cryptocurrencies.
Gold Meets Crypto: The Best of Both Worlds
Thanks to online markets and the introduction of cryptocurrencies, investors can now select a gold-backed cryptocurrency. By harnessing the value proposition of gold with digitization, projects like GoldCoin can offer people a highly liquid crypto asset with the revered aspects of physical gold standing behind it. Gold investing with crypto-backed coins removes the storage problems of physical gold and the complexity of crypto to offer an easily understandable, modern way to invest in gold.
