Gold is a traditional asset that has been in place from the very earliest stage of civilization. On the other hand, Bitcoin was introduced in 2009. So, it’s inherently tough to compare Bitcoin with Gold. But the answer can come into belief considering several aspects of these two assets.
Trust in Gold
From the very earliest stage of civilization, we have been valuing Gold as a precious metal. Gold was served in tombs and temple rituals in Egyptian period to the current jewelry industry. The value of a dollar was fixed to a specific amount of gold till 1971. Thus this metal played a vital role in the U.S. economy.
Gold not being used as money is used primarily for jewelry and as a safe haven in the form of bullion and gold coins. Gold marks your country’s economic strength. The price of gold rises at the time of downturn.
Gold is a time-tested asset which remained valuable in every era and it is yet valuable and is not to lose its value in future.
Think about Bitcoin
Bitcoin was created with the intention to removing third party, to be independent and free of dependence. At its introduction, Bitcoin wasn’t that much eye-catching to people but it became able to catch sight of people when it reached parity with the dollar on February 9, 2011.
A rise in price of Bitcoin was seen in between 2011 to 2015. With this growth, Bitcoin became able to back to the history of finance. But Bitcoin is taken to be a high-risk asset category because of its high volatility.
Gold versus Bitcoin
There is one evident difference between gold and bitcoin which is tangibility. If BItcoin wants to be considered like Gold, then this should have the same attributes as like as gold.
Three common criterions a currency belongs to are:
1: Medium of Exchange: As we can trade both Gold and Bitcoin for goods and services, they are counted as mediums of exchange.
2: Unit of account: Gold can be divided into half ounces or quarter ounces and Bitcoin also can be divided down to 1 satoshi.
3: Store of value: Bitcoin has previously played this role but in recent time this behavior wasn’t seen. Though bitcoin is intangible, many argue that it belongs to zero intrinsic value. It is expected that the day is no so far when Bitcoin will prove itself to be a store of value. You can exchange value safely and privately with cryptocurrency globally. Bitcoin says as a speculative investment and gold as a hedge against financial uncertainty.