Gold bullion is popular for investors to store and protect their wealth. In comparison to Bitcoin, gold is old fashioned. Bullion coins and bars aren’t easy to carry around on you, and you can’t use them to pay for your shopping or to go to the cinema. It’s an investment resource (or a collectible), but old fashioned isn’t always a bad thing.
For centuries investors have moved savings into gold to protect and control their wealth from centralised banking institutions. In recent years cryptocurrencies such as Bitcoin have seen a significant rise in popularity due to their decentralised status away from banks.
Bitcoin has certainly seen its fair share of excitement in the past fews years and at its market peak, cryptocurrencies have generated small fortunes for some investors. While everyone loves a bit of hype and jumping on the bandwagon for the ride, with great gains comes the risk of great falls.
“While the value of Bitcoin is currently that much higher than gold, it’s the volatility of cryptocurrencies that should worry potential investors.“
While gold may not be as exciting as Bitcoin, gold has certainly stood the test of time. Whether it is held in person or stored securely, gold gives physical access to a source of true value. Bitcoin on the other hand in its modern digital world has fallen prey to hacking and theft. For this very reason gold is still considered the ultimate safe haven.
For investors looking for long term safety gold is certainly the preferred choice. During times when inflation is higher than the interest set by the Bank of England, it creates a position of negative real interest rates. This means that fiat currencies such as the GBP devalue while the cost of living continues to rise.
Gold bullion is the ideal escape from this because its value increases in line with inflation. While the value of Bitcoin is currently that much higher than gold, it’s the volatility of cryptocurrencies that should worry potential investors.
Bitcoins are yet unproven, while gold shows consistently that investment in a physical object is the best way to hedge against uncertainty. It should also be pointed out that bitcoins have thus often been used in criminal activity, especially on “the dark web”. This means that despite claims of safety, they currently predominantly exist in a world that isn’t entirely stable.
Gold’s safe haven investment remains during the course of the current economic uncertainty. Elements of change such as Article 50, political leadership in the USA and UK, as well as market growth factors in forthcoming superpowers such as India and China will see more and more investing in gold to protect their wealth.
Gold has been used for centuries as a store of wealth, and is a currency recognised around the world. Gold has been discovered at the same rate for a long time, meaning its scarcity has not been compromised and its value has remained steady, making it ideal for long-term investment.
While both bitcoins and gold have seen impressive growth in recent years, gold’s advantages are clear. As a physical asset that is universally known and highly regarded, its appeal remains greater than any digital alternative.