The whole world is witnessing the cruelty and consequences of the pandemic when it has been and continues to occur in many countries around the world? Great powers like Britain, France, the US, and Germany were also invaded by the pandemic. The loss of life is the heaviest damage caused by the pandemic. Not only that, the economic damage is also not small. The pandemic has slowed down economies around the world, made it impossible for goods to flow, and negatively impacted every aspect of financial markets.
For investors in the traditional market, the pandemic has led to a very high demand for physical gold bars, bringing the price to a new all-time record of $2,000. New technology investors are also starting to look to Bitcoin, to hedge against any possible hyperinflation in the near future?
But the question is which of these two assets would be a better choice for investors looking for a safe haven outside of the traditional financial system. To answer this, let’s go to analyst Kim Chua – Analyst of Primexbt trading – a former trader and market analyst – has provided detailed analysis to determine Which assets perform better and investors will benefit more.
At the beginning of 2020, Bitcoin fell from $8,000 to $3,500, which corresponds to a drop of more than 50% due to fears of a strong COVID19 outbreak. At the same time, gold only fell 13.72% from $1700 to $1450. This data alone suggests that gold is a better choice for investors who value stability and that investing in gold will give them a good night’s sleep. On the other hand, Bitcoin’s wild volatility can be a nightmare for investors who have never experienced it. But in another respect Bitcoin’s performance has outpaced gold over the past decade.
And despite a more than 50% drop in March, Bitcoin recovered quickly within a week and is still going strong and is now significantly outperforming gold in year-to-date performance. . Gold, after hitting a new all-time high, is up 27% on the year to prove it.
In the same time frame, Bitcoin is up over 65% – more than twice as profitable as gold. Looking at a further timeline back to 2016 alone, gold only doubled in value, while Bitcoin increased 28 times its value.
The Battle Between Bitcoin and Precious Metals
The limited supply is the main reason for the sharp increase in the price of BTC and spike in the market. Gold is also quite scarce, also considered a hard asset, however everyone knows that gold hidden in the Earth’s crust, space and humans apply advanced tools that can mine a lot of gold. .
Mining BTC is limited to no more than 21 million BTC and no new BTC is created and not all of that BTC is circulating in the market.
Improvements in exploration and mining techniques to create greater output and more profits also mean that supply increases, gold prices are inched up, more investors pay attention to and demand. also increase, supply and demand both increase, leading to price stability. In the end, when the amount of money poured into gold was exhausted, supply exceeded demand and of course the price of gold fell. Recently, more information has made matters worse: an asteroid has been discovered by NASA that is full of precious metals, severely damaging the rarity of gold if mined.
On the other hand, the amount of BTC is fixed, cannot be produced faster, nor can it generate more than the limit of 21 million, so when the market demand increases, the fixed supply will lead to a bid price. to be owned will increase gradually. This has kept Bitcoin’s value and escalated.
Bitcoin’s Decade of Growth Steals Gold’s Sparkle
Gold has long been a de facto safe-haven asset but that was before the arrival of BTC. BTC was born, investors from distrust began to care and slowly left the traditional market to diversify their investments. As Bitcoin started to outperform gold, more and more investors decided to hold Bitcoin instead of gold.
And BTC is seen by investors as digital gold. The two asset classes are compared very closely, and both have very important positions for investors.
Bitcoin is divisible many times more than gold, more convenient to store, importantly, cannot be counterfeited, and more. However, traditional banks prefer gold to Bitcoin due to its long history as a reserve asset and how it has survived generations of economic crises and changes to the monetary system. Many gold researchers believe that gold is the only “real money” because currencies like the dollar were once pegged to gold. This asset has long been considered the “gold standard” of currency and has never failed in this role. But with Bitcoin beating gold at its own game, a new champion currency may have emerged.
Advocates on both sides have good reason to believe in each of their assets, but empirical evidence has shown that Bitcoin has outperformed the precious metal since its inception and is likely to continue. continue to dominate the market.
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Over time, Bitcoin investors have made significantly more profits than gold holders. Gold has a market capitalization of over $10 trillion, while Bitcoin is just over $200 billion. If Bitcoin rises to the same market cap as gold, the price per BTC will be closer to $500,000 due to the extremely limited supply.
Even after 10 years of operation, Bitcoin could grow 50 times from here, while gold is predicted to double or triple in value from its current price in the same time period. Achieving such a price may not sound feasible for Bitcoin, but with a global currency supply of around $95 trillion and an asset capable of displacing the dollar as the global reserve currency. , this figure is completely achievable.
Owning Bitcoin instead of gold has been the better investment of the past 10 years and will continue to be. Investors stuck in choosing between these two asset classes may want to consider how robust both are before making an investment choice. Gold researchers should also consider Bitcoin, due to its similarities and additional benefits beyond what the precious metal can offer.
Both gold and Bitcoin are tradable on Primexbt trading platforms, where investors can build a diversified trading portfolio that includes safe-haven assets. Users can also buy Bitcoin directly using a third-party plugin in their PrimeXBT account dashboard and make sure they don’t miss the next Bitcoin bull run.
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Primexbt trading was born a few years ago but it has soon established itself in the financial market. Here, you can trade from cryptocurrencies, forex, commodities and indices… Outstanding advantages of Primexbt trading such as: beautiful interface, easy to use, low fees, leverage for home use. investors make money even when the market is down, complete set of supporting indicator tools, Primexbt convesting technology helps new investors to refer to trades of professional investors, Primexbt turbo technology allows demo investors before entering actual orders……
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