Posts

Is Bitcoin Better Than Gold? Just Follow The Money

avatar of @livingdigitally
25
@livingdigitally
·
·
0 views
·
2 min read

Many investors, including myself, have always seen gold as the "reserve" and save investment to fight inflation. When you buy gold, you own the actual commodity which makes you feel safe. Something about being able to actually hold in your hands, what you bought provides a sense of security.

These emotions and thoughts behind gold are beginning to fade and a new "reserve" is emerging. What I'm talking about is bitcoin and this transition is seen in the price activity.

Let's take a look at the past year of gold. When the stock and cryptocurrency markets around the world were taking a dive from COVID the price of gold followed. The low for the year occurred around $1400.

The price recovered and hit the yearly high in August, around $2000. This was an increase of 42%. If you bought gold at its low and sold in August, you would've made $600.

Now, let's take a look at the one year chart of bitcoin. Similarly, bitcoin took a dip in March from the COVID-19 pandemic. During the beginning of the year, Bitcoin traded between $6,000 - $8,000 and dropped down to $4,000 in March.

The price recovered exponentially and with this the new "reserve" was born. Bitcoin hit a new all time high in January at $42,000. An impressive increase of 794%. If you bought gold at its low in March, and sold at the peak in January, you would've made $37,000.

With the markets down and inflation at an all time high, many would've expected to see gold hit new highs. The money didn't go into gold though, it went into bitcoin.

The risk's of bitcoin are much larger than gold but it seems that people are willing to live with that risk. I'm not saying that someone should invest in bitcoin over gold or that someone should invest at all. All investments carry risk and make sure to decide how much risk you can handle.

Posted Using LeoFinance Beta