Why Bitcoin is a better investment than gold
17.03.2024 15:00 3 min reading
The price of Bitcoin has risen by just over 150% in the past year, largely due to the recent approval and launch of spot BTC exchange-traded funds (ETFs).
Interestingly, gold has also witnessed a bullish trend, hitting record highs. However, when comparing these two assets, it is clear that BTC has a significant advantage over the precious metal.
There are similarities between Bitcoin and gold
Both assets are characterized by deficit. Bitcoin, with its limited supply of 21 million tokens, and gold, which exists in limited quantities in the Earth's crust, adhere to basic economic principles where increased demand correlates with rising prices. Historically, gold has been considered a safe asset due to its scarcity and serves as a store of value for extended periods.
In addition to their role as stores of value, Bitcoin and gold also offer functionality. Although gold is primarily used in jewelry because of its rarity and aesthetic appeal, it also finds minor uses in industry. On the other hand, the decentralized nature of Bitcoin and its global accessibility make it advantageous for large-scale direct fund transfers, offering near-instant settlement.
Despite these superficial similarities, there are major differences between BTC and gold. One critical aspect that needs to be revisited is the deficit. While the supply of gold may seem fixed, approximately 77% of known gold reserves have been mined, with significant reserves remaining underground.
In response to rising demand, mining companies may increase their mining efforts, potentially altering supply dynamics. In addition, the possibility of discovering gold deposits outside the confines of the Earth further challenges the idea of scarcity.
In contrast, Bitcoin's scarcity is finite. BTC's software stipulates that the flagship cryptocurrency's supply is limited to 21 million, a feature that cannot be changed without consensus among the majority of network nodes. This inherent scarcity, combined with the inability to regulate supply in response to demand, contributes to Bitcoin's historical volatility.
Moreover, Bitcoin is superior to gold in terms of portability and divisibility. As a digital asset, Bitcoin is easily transportable and divisible to eight decimal places, making it easy to use in transactions. In contrast, the practicality of using physical gold for everyday purchases is limited, highlighting its lack of functionality compared to Bitcoin.
В debate for store-of-value assets, Bitcoin has emerged as the clear winner. Over the past five years, Bitcoin has significantly outperformed gold, with its price rising 1,630% compared to gold's modest 58% increase in the price of gold per ounce. This significant financial gain underscores Bitcoin's superiority as an investment vehicle, especially in times of macroeconomic uncertainty.
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Looking ahead, comparisons between Bitcoin and gold are likely to continue. However, given the factors discussed, Bitcoin stands alone as a leading cryptocurrency and store of value asset, poised for continued growth and adoption in the coming years.
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BITCOIN SCAM!!! GOLD IS AN INTERNET DEPENDENT THING WHILE BITCOIN LIKE YOU STOP THE NET AND YOU CAN'T EVEN PUSH IT IN YOUR ANUS.GIVING CASH FOR SOME MADE UP AMERICAN TRAPS IS JUST CRAZY!!!!