Should You Buy Gold Or Bitcoin? A Real Estate Investors Perspective On The Alternative Hard-Assets

Comparing the Two

For hundreds of years, #gold has dominated the safe-haven asset arena, while #bitcoin was launched just over a decade ago and has only achieved widespread recognition in the last few years. I've avoided both of these assets over the last 10 years and have been focused on building cash-flowing businesses and aquiring cash-flowing #assets, BUT as I have begun to diversify my #portfolio and am investing in the stock market, I've begun to start asking what else might be a great store of #wealth. Below, we'll compare Gold and Bitcoin as investment options head-to-head:

1. Transparency, Safety, Legality

Gold’s established system for trading, weighing and tracking is pristine. It’s very hard to steal it, to pass off fake gold, or to otherwise corrupt the metal. Bitcoin is also difficult to corrupt, thanks to its encrypted, #decentralized system and complicated algorithms, but the infrastructure to ensure its safety is not yet in place. The Mt. Gox disaster is a good example of why bitcoin #traders must be wary. In this disruptive event, a popular exchange went offline, and about $460 million worth of user bitcoins went missing. Many years later, the legal ramifications of the "Mt. Gox" situation are still being resolved.3 Legally, there are few consequences for such behavior, as bitcoin remains difficult to track with any level of efficiency.

2. Rarity

Both gold and bitcoin are rare resources. The halving of Bitcoin's #mining reward ensures that all 21 million Bitcoin will be out in #circulation by the year 2140. While we know that there is only 21 million bitcoin that exist, It is unknown when all the world's gold will be mined from the earth. There is also speculation that gold can be mined from asteroids, and there are even some companies looking to do this in the future.

3. Baseline Value

Gold has historically been used in many applications, from luxury items like jewelry to specialized applications in dentistry, electronics, and more. In addition to ushering in a new focus on blockchain #technology, bitcoin itself has tremendous baseline value as well. Billions of people around the world lack access to banking infrastructure and traditional means of finance like credit. With bitcoin, these individuals can send value across the globe for close to no fee. Bitcoin's true potential as a means of banking for those without access to traditional banks has perhaps yet to be fully developed.

4. Liquidity

Both gold and bitcoin have very liquid markets where fiat money can be exchanged for them. Although from personal experience with #silver I can tell you that any meaningful amounts of gold are pretty terrifying to store or carry around to transact with.

5. Volatility

One major concern for investors looking toward bitcoin as a safe haven asset is its #volatility. One need look only to the price history of bitcoin in the last two years for evidence. At its highest point, around the beginning of 2018, bitcoin reached a price of about $20,000 per coin. About a year later, the price of one bitcoin hovered around $4,000. It has since recovered a portion of those #losses, but is nowhere near its one-time high price point.

Besides overall volatility, bitcoin has historically proven itself to be subject to market whims and news. Particularly as the #cryptocurrency boom swept up a number of digital $currencies into record-high prices around the end of 2017, news from the digital currency sphere could prompt investors to make quick decisions, sending the #price of bitcoin upward or downward quickly. This volatility is not inherent to gold for reasons mentioned above, making it perhaps a safer asset.

In recent years, a number of alternative cryptocurrencies have launched which aim to provide more stability than bitcoin. #tether, for instance, is one of these so-called "stablecoins." Tether is linked with the U.S. dollar in much the same way that gold was prior to the 1970s. Investors looking for less volatility than bitcoin may wish to actually look elsewhere in the digital currency space for safe havens.

Disclaimer

As many of you know I am primarily a Real Estate Investor and so most of what I write about #bitcoin and #gold comes from research and very little actual experience with either asset. That being said I do hold a fraction of Bitcoin and a small amount of gold as well as some silver and a small stock portfolio. The majority of my wealth has been from holding and flipping real estate as well as a small fortune being held in the growing value of my real estate training company.

BUT I have been investing in #leo and #wleo recently and am loving the huge gains we have seen since the meteoric rise of Bitcoin which leads to me to a future article where I will explain why I believe these lesser known #alt-coins have more upward potential than the larger more traded currencies.

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