Plenty of investors are wondering whether they should park their money in gold, Bitcoin or other investments. There is a growing sense the world’s top banks are entering dangerous territory. More and more investors are giving strong consideration to alternatives rather than those seemingly tried and true traditional investments. If economic uncertainty increases, there will likely be a flood of money to so-called safe haven investments like gold and other precious metals. Some investment gurus think cryptocurrencies like Bitcoin will fare quite well if the economy falters. The question is quickly becoming how much money to put in each of these investment vehicles rather than whether they are worth investing in. Here’s why.
Invest in Gold and Bitcoin
There is an emerging sentiment amongst seasoned investors that gold and Bitcoin complement one another quite well. This means that the positives and negatives of each counterbalance in a symmetrical manner, providing a relatively safe investment duo that can withstand considerable market fluctuations. Time just might prove that Bitcoin and gold are best bought in unison. Both could play an important part in economic events across the next years and decades.
About $7 trillion of gold exists in the world. Around $33 million of Bitcoin exists. Bitcoin is anti-establishment at its core as it is an alternate currency created through a complex network of computing power. Gold is an indestructible asset that will always be valued. Bitcoin exists in a separate sphere compared to traditional investments and banking systems. If banking systems bust, Bitcoin and gold stand to benefit. Gold has an important advantage in that it can’t be traced like Bitcoin or another form of digital currency. You can transport gold and Bitcoin with ease. Consider the fact that a single gold bar can fit in your pocket and fetch $40,000. Such a gold bar can also be bartered for valuables worth a similar amount of money.
Gold has been valued for millennia. There is no way this precious metal will suffer a massive decline in value or eventually become worthless. It has stood the test of time better than every other asset known to man. Furthermore, gold’s price is incredibly stable. It doesn’t fluctuate like most other contemporary investments. Such stability is responsible for gold’s use as a standard value for pricing and contracts.
Bitcoin and Gold for Transactional Purposes
Bitcoin is much easier to use for transactions than gold bars, coins and other items containing this beautiful metal. Bitcoin is especially effective for transactions with others across the country and the globe. There is no need to rely on Western Union or another money wiring service that charges considerable fees when one can send money by way of Bitcoin. This crypto-currency can be subdivided in a nearly infinite manner. This means it is more than sufficient for minor transactions than gold and other precious metals.
As an example, breaking down gold to the smallest tenth-ounce of around 3.1 grams yields a value of $120. That is a substantial amount of money. As a result, using Bitcoin for small transactions is quite advantageous compared to gold. Yet one of the few faults in Bitcoin is that it has a short history and a lack of stability. This cryptocurrency won’t be used as a basis for pricing or contracts for quite a while. A track record must be established in order to inspire faith and confidence that Bitcoin is a reliable standard of value. Invest in gold as well as Bitcoin and this shortcoming won’t be nearly as glaring.
A Vision for the Future of Gold and Bitcoin
It is certainly possible that people of the future will use Bitcoin in a manner somewhat similar to a checking account. Gold might be used in a manner similar to a savings account. A moderate Bitcoin balance would be in place for transactions. This cryptocurrency might eventually be sold for gold and other precious metals and vice versa. This way, one could add value to assets held for the long haul or his transaction account as necessary. Perhaps payments will be made in Bitcoin yet contracts and prices could be denominated in gold. This is already occurring for goods denominated in today’s dollars where Bitcoin is an acceptable form of payment.
The model proposed above is not egregiously different from arrangements in other nations. Areas of the world with a history of weak currencies sometimes use euro-denominated assets to represent a value store. Prices might also be denominated in euros. Yet the actual transactions can be executed with the local currency. This happened in Turkey with the euro and the local lira. China also has a lengthy history of using gold ingots for transactions of considerable magnitude. Time will tell if a consolidated system centred on gold with a Bitcoin option for small to medium-sized transactions eventually develops.
Diversify Your Portfolio with Long Positions in Gold, Bitcoin and Beyond
The bottom line is that the masses are quite interested in Bitcoin. This crypto currency will likely be around for quite some time. The same is undoubtedly true of gold. To some, the fact that central banks aren’t involved with Bitcoin is a major benefit. Add in the fact that gold’s strengths offset Bitcoin’s weaknesses and vice versa and it is easy to see why both are becoming increasingly coveted as time progresses. This is precisely why savvy investors are pouring their money into Bitcoin as well as gold.