Can bitcoin considered the gold of crypto investment?

[Dokdo766]

In recent years, investing in Bitcoin has been seen as a possible way to diversify one’s investment portfolio. As a result of COVID-19 and what’s happened to the stock markets, an intriguing question has been brought up: is investing in Bitcoin as good as investing as gold?

Just a little while ago, Stanley Druckenmiller, an American billionaire, spoke on CNBC about his views on Bitcoin: that it “could be an asset class that has a lot of attraction as a store of value to both millennials and the new West Coast money.”


Why Druckenmiller’s views matter

His views were the inspiration for this article! Druckenmiller is a notable figure in the global financial industry due to his 30+ years of experience in financial management. For a self-declared “dinosaur” who owns a ton of gold, mentioning that he now owns some Bitcoin sure is something, especially for many who strongly believe in the cryptocurrency.

In addition, Druckenmiller publicly recognizing that “Bitcoin is an “asset class” with a potentially strong investment case for some investor groups” (as shared by Coindesk) makes it a “worthy validation”. What’s perhaps significant is how Druckenmiller’s views came right after Bitcoin’s correlation with gold hit an all-time high.


Bitcoin & gold’s all-time high correlation

Coin Telegraph found that Bitcoin and gold “reached a record high of 68% as Bitcoin hit US$12,000” in early August 2020, though this “correlation crashed by 20% the following week”.

Despite this, some say that Bitcoin could become digital gold due to the current pandemic’s uncertainty as investors veer towards assets that store value, i.e. Bitcoin and gold.

In fact, on the morning that this blog post was written (November 18, 2020), BBC reported that Bitcoin hit a three-year high of US$18,000/€15,000 as a result of this: investors “flocking to cryptocurrencies during the pandemic-driven volatility on global stock markets”.



Bitcoin and gold

Is having Bitcoin as good as having gold in your investment portfolio? While the debate goes on out there, there are valid comparisons between Bitcoin and gold as investments.

Rarity
The total supply of Bitcoin is 21 million, all of which will come into circulation by 2140 due to Bitcoin halving. Similarly, with gold, no one knows when all of it will be mined from the earth. In fact, there may even be gold being mined from an asteroid in the near future as the US Money Reserve has reported!

Exchange for money
Bitcoin and gold can both be exchanged for fiat currency, and vice versa. What’s interesting is that while Bitcoin acts as a currency as you can use it as a form of payment, the same can’t be said for gold. Gold itself can’t be used as a form of payment.

Baseline value
Both gold and Bitcoin have tremendous baseline values due to the way that they are used. Gold has been used in many ways throughout history, while Bitcoin brought a new focus to blockchain technology and is enabling global financial inclusion.

Transparency and safety
With Gold’s established trading system, it’s difficult to steal it and to pass off any imitations. Hence, its transparency as it’s difficult to corrupt. Likewise, Bitcoin is difficult to corrupt because of its decentralized system that’s encrypted. While both are transparent, gold is deemed safer than Bitcoin as Bitcoin’s infrastructure to ensure safety is not yet fully in place.

Volatility
Fox Business states that “gold is considered a safe haven because it has acted as a store of value, maintaining its purchasing power for thousands of years”. Bitcoin, on the other hand, is known for its ‘wild’ volatility with its recent high of US$18,000 on November 18 and hovering around US$4,000 1.5 years ago.


Can Bitcoin be considered the “gold” of crypto investment?

While many do indeed see Bitcoin as a safe haven like gold, and Druckenmiller himself recognizing that Bitcoin can be an asset class, others such as Shane Oliver (head of investment strategy and chief economist, AMP Capital) and Marie Tatibouet (CMO, Gate IO) are cautioning against this perspective. The reasons? Volatility, liquidity and rate of adoption. Still, this hasn’t stopped crypto enthusiasts from believing it could be.

Bitcoin vs Gold, what is a better investment in your opinion?

Thanks,
Karl
Bit(casino).io

[Obi theo]

Honestly it's a very nice write up, but you would have at least put the source of the article.
It against the forum rule I hope you know and they are consequences for breaking the rules
Sources: .https://bitcasino.io/blog/cryptocurrency/bitcoin-gold-crypto-investment
 If you want to make a post and it is been published try putting the link .
 And I would go for bitcoin as a better investment .
Dokod766 next time read the rules.
  

[Upgrade00]

While both are transparent, gold is deemed safer than Bitcoin as Bitcoin’s infrastructure to ensure safety is not yet fully in place.

Bitcoin is digital and as such more transparent and imo, it's also much safer than gold. There has been numerous cases of counterfeit gold coins and there are definitely fake gold bars in circulation, but there are no fake Bitcoins as it's virtually impossible to infiltrate the network. IIRC, there has only ever been one case of a vulnerability in Bitcoin's network being exposed, which was fixed pretty quickly.

is investing in Bitcoin as good as investing as gold?

Check out this thread by Fillippone - https://bitcointalk.org/index.php?topic=5304479.msg56026915#msg56026915
I highlighted the reply which discussed Bitcoin and gold; According to the reports more money is flowing into Bitcoin (especially from institutional investors) and funds are going out of gold ETFs, that would suggest more people are accepting Bitcoin as a SoV and a good investment.
In my opinion however, It's all down to individual preference. You invest in what you understand best.

[Josefjix]

Bitcoin can never be gold neither can gold ever be bitcoin, the volatility of bitcoin makes it far distinctive and more or far mobile than gold. Bitcoin is just 12 years old, gold has been in existence and in use for as old as the human civilization. Individually preferences plays a pivotal role in one choosing what he/she deems fit investing on. If I were to go by the option between gold and bitcoin, I'd always pick bitcoin ahead of gold. Why? because I understand the security behind bitcoin, usability and uptrend movement in my case I will advice anyone to do the same by analyzing what you know and understand before making investment.

[bitmover]

Bitcoin can never be gold neither can gold ever be bitcoin, the volatility of bitcoin makes it far distinctive and more or far mobile than gold. Bitcoin is just 12 years old, gold has been in existence and in use for as old as the human civilization. Individually preferences plays a pivotal role in one choosing what he/she deems fit investing on. If I were to go by the option between gold and bitcoin, I'd always pick bitcoin ahead of gold. Why? because I understand the security behind bitcoin, usability and uptrend movement in my case I will advice anyone to do the same by analyzing what you know and understand before making investment.

Gold is highly volatile.
Have you ever looked at gold charts?


https://br.investing.com/currencies/xau-usd

When people say bitcoin is the digital gold, this has nothing to do with volatility, but with being a reserve of value, as it is very scarce.

[Little Mouse]

Bitcoin has performed much higher than GOLD, well can be called as gold of crypto. Anyway, I just have read an article from my local news who were also mentioning it as gold of crypto. Anyone from Bangladesh who didn’t read till now- link to the news

[qwertyup23]

The comparison between gold and bitcoin has been argued for a long-time now. What separates them is their natural distinction as the former is tangible while the latter is intangible. Like what most have mentioned, gold is susceptible of being fake while bitcoin cannot be faked due to its transactions being recorded in the blockchain.

Many have categorized bitcoin as the same as gold investment but the former has a very volatile price unlike gold. Still, I highly suggest that you diversify your investments by investing into both for maximum profit.

[serjent05]

The comparison between gold and bitcoin has been argued for a long-time now. What separates them is their natural distinction as the former is tangible while the latter is intangible. Like what most have mentioned, gold is susceptible of being fake while bitcoin cannot be faked due to its transactions being recorded in the blockchain.

People tend to compare new things to the older ones so it is not surprising that people compare Bitcoin to Gold.  They are indeed different but I don't think that comparing Bitcoin to gold is a harmful thing.  Not only recorded on the blockchain but the validators (nodes and miners) are up 24/7.  The moment there is a "fake" BTC injected(attack) on the network, it is easily rejected since all transactions need to be confirmed and validated.

Many have categorized bitcoin as the same as gold investment but the former has a very volatile price unlike gold. Still, I highly suggest that you diversify your investments by investing into both for maximum profit.

Definitely agree, we shouldn't put our 'eggs' in one basket.   That way we can minimize losses if ever something unexpected happens.