Gold or Bitcoin: 6 Reasons You Should Buy Cryptocurrency This Holiday Season


Gold has been used for millennia for several purposes. He has a charming and shiny look and is often said to be lucky. Gold is used in religious events, as well as for ornamentation and preservation of assets.

But, when it comes to an investment choice, have you ever wondered if gold is all it’s supposed to be?

Excluding the religious and auspicious elements of gold, a new competitor as an asset class has grown rapidly over the past decade in the form of Bitcoin, or the digital gold of the 21st century. Read here to see if this cryptocurrency can be the new gold, which you should buy to support your future during festival season.

Gold and Bitcoin: are the two the same?

Gold and Bitcoin, according to Professor Purushottam Anand, Assistant Professor, IFIM Law School, are distinct in nature and utility.

“Gold has long been a store of value and a medium of exchange.” Cryptocurrencies are a relatively new asset class, only around for a decade. Although many cryptocurrency enthusiasts compare some of the more popular cryptocurrencies, like Bitcoin, to gold, Professor Anand argues that “cryptocurrencies differ in nature, utility, and the technology involved.” .

Other experts, on the other hand, believe that Bitcoin is heavily influenced by gold and in many ways outperforms it. However, skepticism and lack of clarity on the part of the government deters many.

Kashif Raza, the person who watched Bitinning, believes gold deserves all the praise it has received as an asset class so far. However, Bitcoin is the way of the future.

According to Raza, the main characteristics that have made gold a globally accepted store of value for centuries are its uniqueness, value and rarity. Bitcoin, despite its youth, exhibits all of these characteristics and in many ways surpasses gold.

“The use of gold paved the way for trade. Gold deserves all the praise it has gone so far. Raza adds.

However, Bitcoin has offered access to a digital commodity that may be ten times more lucrative than gold in the long run for the new generation, which trades electronically and is less tied to the concept of tangibility, he says. .

Gold has long been favored, which makes it the essential asset of festivals. Bitcoin, on the other hand, quickly refutes all of these claims. Check this out:

  1. For starters, they are unique and limited.

Gold is unusual, Raza says, in that its supplies do not increase with demand. However, increasing the supply of Bitcoin is impossible.

“We have heard for years that gold reserves are going to run out in the future. In reality, however, the supply has increased, but not so has its demand. There are countless undiscovered sources of gold, and we have no idea how much gold remains to be unearthed. However, for Bitcoin, the last one will be mined by 2141. He believes that only 2.2 million bitcoins will be there even after 18.8 million has been mined.

Bitcoin is unusual, according to Manoj Dalmia, founder and director of Proassetz Exchange. It cannot be generated at will because there are only 21 million and no one can do more. This implies that it cannot be controlled or tampered with by governments.

When it comes to gold, no one will be able to produce enough gold to meet demand. According to Dalmia, the scarcity of gold varies depending on the effort to find it.

“Bitcoin has received the digital gold label due to the limited number of accessible coins,” explains Nischal Shetty, founder of WazirX. HOLDERS believe that these features, along with its availability and high liquidity, make it suitable for holding money for long periods of time, with the expectation that its value would increase over time.

Shetty points out that the parallels between Bitcoin and gold must be distinguished.

2. Tangibility and adaptability are important.

It is only by seeing that one can believe. Gold is a physical asset. It’s small enough to fit in your hand and store at home or in a bank locker.

On the other hand, everything related to bitcoin is virtual. So how can you believe in virtual reality? Something that has no physical form and cannot be felt… The debate continues.

Raza, on the other hand, has a different opinion. He claims that things have changed. We don’t care about money anymore, like we did just a few years ago.

“This generation has switched to digital payment methods and does not prefer cash transactions,” says the author. It is convenient to use for online and mobile transactions. “The tangibility argument doesn’t make much sense for such a generation,” he argues.

“Gold is not a dynamic investment; you can’t move it around much in an emergency, and it can’t be sold in increments either. “Instead, one could trade Bitcoins in very small percentages on a smartphone in an instant,” he explained.

A bitcoin is made up of 100 million satoshis, with a satoshi equal to Rs 0.0355223. (according to the tariff in force).

3. Returns

Since 2010, gold has returned around 158%. In 2010 the cost of 10 grams of 24 karat gold was around Rs 18,500. The cost of the same amount of gold is now Rs 47,810.

Compared to Bitcoin, Raza thinks gold has disappointed. The cryptocurrency has provided an annual return of around 230%!

“Bitcoin has become the number one asset, dislodging gold from its heyday,” agree Sharat Chandra, Blockchain and Emerging Tech Evangelist. With an annualized return of 230%, it is the best performing asset class of the decade. Bitcoin has become a rival to gold and is therefore dubbed “Digital Gold” by Bitcoin maximalists and crypto fans around the world.

4. Volatility

It’s not just Bitcoin that is volatile. Even gold, experts say, has had its ups and downs.

“One could argue about the price fluctuations of bitcoin, but let’s not forget that gold experienced its fair share of volatility before it became an institutional asset.” “Because bitcoin is a relatively new asset class, volatility will decrease as the market matures and more institutional players enter,” adds Chandra.

5. Purity

A gold coin can be forged, so it must be checked for purity. No one, on the other hand, needs to verify the purity of Bitcoin.

“Bitcoin and gold cannot be copied or counterfeited. Bitcoin is easily identifiable and difficult to forge. “Gold is easily identifiable, although the purity must be verified in some cases,” says Dalmia.

6. Inflation protection

According to Chandra, cryptocurrency can help hedge portfolio risk, making it comparable to gold in terms of mitigating inflation concerns. “Today’s generation is not interested in physical or paper gold. They can spend money on crypto because of the profits it has generated, ”he argues.

According to Dalmia, investors view bitcoin as digital gold and a hedge against inflation, anticipating growth faster than the current rate of inflation over time. “The same is true for Gold, despite its current poor performance. “

bitcoin gold

Should you invest money in Bitcoin?

Investing in gold has always felt secure. So that you can sell your gold for a better price. Professor Anand, on the other hand, believes that Bitcoin and other cryptos may not be able to fulfill this role in India anytime soon.

“Investing in gold provides a feeling of security thanks to the consistency of prices. With cryptocurrencies, price volatility is higher, making it impossible to predict price movements, especially in the short term. While long-term investors may have sold their cryptocurrencies at a higher price, they may have to wait until the market recovers from a short-term slump before they can record profits. As a result, he argues, “cryptography is unlikely to play this role in the future.”

“Gold has a unique place in our culture and has been historically and culturally linked to celebrations. Because of its tactile form and aesthetic value, investors love gold at festivals. Crypto may be a “better investment for higher returns,” but gold is a “safer investment,” according to Professor Anand.

However, analysts believe that the value of Bitcoin will continue to rise in the long term.

According to Raza, Bitcoin is a long-term investment choice.

“We can hold gold for quite a long time if we buy gold. Many individuals only sell gold for the last option or in times of severe distress. Bitcoin can be used to earn money if it is invested for a long time.

Bitcoin, analysts say, is already the digital gold of the 21st century. They stress, however, the need for awareness and caution.

“Bitcoin has already been digitized gold for me for years,” says Kumar Gaurav, founder and CEO of Cashaa. People need to grasp the fundamentals of crypto to make a direct comparison and should go beyond price speculation, ”the author explains.

Crypto donations, according to Gaurav Dahake, founder and CEO of Bitbns, are gaining ground. “While gold has returned 12-14% on average, Bitcoin has significantly outperformed all other traditional assets and offers a very attractive long-term investment option,” he says.

crypto vs forex vs stock vs gold vs bank savings e1634200316949

How much money should we spend?

There is still a long way to go in terms of regulatory certainty for Bitcoin and other cryptocurrencies. Experts recommend maintaining a well-balanced financial portfolio when it comes to personal money. Even when investing in cryptocurrency, keep a sense of balance.

Although there is no restriction on the amount of money that can be invested in Bitcoin. Experts advise against investing all your savings or emergency money in Bitcoin.

“Crypto investments should not exceed 5% of your entire portfolio. “Before investing in cryptocurrencies, follow the investment principles and do your research,” advises Chandra.

According to Professor Anand, gold and cryptocurrencies have distinct goals and an investor should carefully diversify their investment portfolio based on their tolerance for risk. Before making such choices, seek advice from financial advisers.

Article edited and proofread by Nikita Sharma.


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