The Better Form of Investment: Bitcoin Cryptocurrency or Gold?

• Bitcoin is a form of cryptocurrency and is highly recognized in the crypto market. 
• Gold is the traditional form of investment strategy that excels in times of recession and market corrections. 
• The better form of investment from Bitcoin and Gold is decided based on several factors. 

Bitcoin and gold are both rare in their categories of cryptocurrencies and metals, respectively. The better investments from both depend upon the investing strategy and risk tolerance. 

Bitcoin and Gold

Bitcoin, a crypto coin, is a form of digital currency just like other cryptocurrencies. It is not controlled by any government, authority, bank, or financial institution. Hence, it is decentralized, unlike our physical currency. It was the first established cryptocurrency, a digital asset that can be exchanged. It was developed by an anonymous Satoshi Nakamoto as a “new electronic cash system” in 2009. It is so completely decentralized that even Bitcoin owners are anonymous, with no details related to their accounts, names, social security numbers, or other identifying features. 

There are currently 16 Million Bitcoins and the maximum limit of their existence is 21 Million. Just like diamond and gold mining, Bitcoins also mine to make more. The process of mining involves computers that solve extremely complex and challenging mathematical problems to make more Bitcoins which gets harder each time. Every time the problem gets solved, a new block of the Bitcoin gets mined and processed to the Bitcoin address of the miner. There are other ways of getting Bitcoins than mining, which is by accepting Bitcoins as a payment for services and goods. There are many websites that give Bitcoins after completing certain tasks. 

Since it is a form of digital currency, it has some risks. There is no governing body and hence, it is more appealing to criminals. The lack of regulation makes it risky as well. Gold performs very well during market corrections as it maintains its value. Its price holds steady somewhat and tends to rise as investors move from stock to gold during times of recession. Hence, it is an investment that moves oppositely, against market corrections or recessions. Many investors turned to traditional strategies and transitioned to gold during the COVID-19 pandemic. 

The Better Investment 

The best form of investment can be estimated through different factors such as regulations, utility, liquidity, and volatility. 

1. Regulations: Bitcoin depends on the country. However, gold faces some restrictions. 
2. Utility: The number of uses of Bitcoin is increasing. Gold is used across many industries and products. 
3. Liquidity: Bitcoin liquidity depends on the market, whereas gold liquidity depends on the market and type of asset. 
4. Volatility: Bitcoin started 2021 at $32,782, rose to a high of $68,789, and closed the year at $46,306. Gold started 2021 at $1,943 an ounce, dropped to a yearly low of $1,683, and ended the year at $1,805. 

Conclusion 

Hence, the better form of investment from Bitcoin and gold cannot be decided as some of the factors favor Bitcoin whereas others favor traditional gold. Regulation wise gold has some restrictions but Bitcoin depends on the country. The Bitcoin market is still growing. However, they both are rare in their respective categories, as gold is one of the rare metals and Bitcoin is rare compared to other cryptocurrencies.