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

[Karl_BC]

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
Bitcasino.io

[Coin63@]

Bitcoin more valuable than gold but gold is more popular than bitcoin. Gold is a popular and valuable metal which accepted all over the world and governments supports and reserves gold as central Bank liquidity assets. On the contrary bitcoin is a popular but only few countries accepted Bitcoin. And governments not permits bitcoin like than gold.

[gotbounty]

Perhaps it is very appropriate to call Bitcoin gold in the world of Crypto. Because the value of Bitcoin is very valuable and also continues to increase. Even investing in Bitcoin can make anyone rich suddenly. However, it comes with a big risk, because people can also suddenly become poor with Bitcoin.

[pelana vreo]

Good article,
Gold is still an attraction for world investors, the scarcity of gold is also one of the drivers of its value to be higher because it is certain that gold will be scarce someday, Bitcoin has many advantages as a digital asset and can be used for payment systems, from here Bitcoin and gold have advantages. different, depending on how we use it.

[Altcoin1998$]

Bitcoin is a limited supply and gold is a unlimited production of nature. Bitcoin undoubtedly a virtual gold of investors and traders on the other side gold is the best valuable asset and it's price always be upwards. Bitcoin price sometimes crashing but gold price always upwards. I think gold is better than bitcoin.

[vegasus]

In my opinion, Bitcoin is as good as gold investment. But, bitcoin is  a kind of good and trusted telegram or I would like to know whether it is still really influencing or not, watching this mess cognition about the new group I a following, But bitcoin is very volatile, different with 2019

[Cryptoz]

It deserves if we want to call investing in BItcoin is like investing in gold. Instead, the potential for getting big profits can be higher in Bitcoin investment. If you learn and look at the price improvement, you must realize that the gaps in the price improvement are very big. So, it is very promising to invest in Bitcoin.  It is as good as investing in Bitcoin or the like. 

[Msweet]

It has to be acknowledged that bitcoin cryptocurrency is like gold.  Because the price of gold never goes down.  Although occasionally a little less.  But after a while it grows in more size.

[jakasantosa]

Everything depends on the person who calls it because assumptions can be personal. If I think maybe Bitcoin is considered the "gold" of crypto investing because it is an asset that most investors are looking for.

[bigcash2011]

If you analyse both btc and gold as investment you will see due to limited and low supply btc is a much more valuable asset it is already termed as digital gold by investors but i would rank it much higher than gold and you will see it will become super expensive in near future.

[Prime]

IMO, It can be stated like gold but no digital gold. What is the similarity between Bitcoin and Gold? The similarity: they have a very potential future and people can invest in both of them safety. If you want to invest in a digital asset, so yes you need to choose Bitcoin because it is very potential to gain bigger profits.

[Senin]

Bitcoin should not be overly idealized.  It is mostly compared to gold because of its high current price and expectations of its further price growth.  In all other respects, these are financial assets that are practically opposite in their characteristics.  First of all, gold has real physical value, which bitcoin does not have, whose value is based on belief in its value.  In a few hours, bitcoin can lose several tens of percent of its price.  This cannot happen with gold. Tomorrow the price of bitcoin may well fall again to ten thousand dollars.  Investors who bought bitcoin yesterday for $ 19,000 will be surprised to ask where their digital gold was shared.  One could argue that despite all this, bitcoin is still generally growing in price.  Yes indeed.  While growing.  While...

[vaysar]

Something needs to be preserved in value, US dollars are only depreciating every day, and gold is not only outdated but also too troublesome to use. Bitcoin can fall by half but rise tenfold. For me, the choice is simple - Bitcoin.

[MRM]

Although investing in bitcoin has high risk. Bitcoin has spread all over the world due to the high risk of investing in Bitcoin. But it is not more popular than gold. They are much more valuable than worldwide gold. However, investing in gold is not very profitable. However, there is no risk. Investing in Bitcoin is as risky as it is much more profitable. So we should invest on bitcoin.

[DAMKAR]

Yes It can, I agree bitcoin can be considered the gold of Crypto Investment. Bitcoin is high demand and limited supply, I see many people have enthusiast to invest in bitcoin. Bitcoin is very profitable and good for Investment, because bitcoin is the King of Crypto