MonthMarch 2021

Gold vs. Bitcoin: Which Is Better for Investments?

Investing is one of the best ways to increase your worth and build personal wealth. With that said, finding the right investment opportunities can be a challenge. If you’re looking at gold vs. Bitcoin, these are a few things you’ll want to consider.

Bitcoin Is Extremely Volatile

Like other forms of cryptocurrency, Bitcoin tends to be very volatile. It’s not unusual for the value of Bitcoin to shift throughout the day dramatically. This means that you could see amazing returns on your investment, but it also means you could experience heavy losses.

That’s why you’ll always want to show some caution before investing in Bitcoin. Investing in Bitcoin can pay off for you, but putting all of your investment funds into Bitcoin will leave you at risk. If you choose to invest in cryptocurrency, you’ll want it to be a part of a diverse investment portfolio.

Gold Is Stable

In sharp contrast to cryptocurrency, the value of gold tends to be very stable. Gold tends to hold its value even during times when the value of the dollar increases. For this reason and others, gold is often used by investors to protect their money during unstable times.

Since gold tends to be fairly stable, it’s considered to be a low-risk form of investment. There’s a strong chance that you’ll lose money if you decide to invest in cryptocurrency or even invest in something that’s less volatile, like the stock market. It’s very unlikely that you’ll see significant losses if you decide to invest in gold.

Bitcoin Can Provide Fast Returns

One big benefit of Bitcoin is that a smart investment could lead to very fast returns for you. If you’re able to buy Bitcoin right before its value rises, you could sell the currency within days, which could lead to huge profits.

With that said, there’s no guarantee that you’ll see fast returns with Bitcoin. While some people have been able to make money quickly, particularly people that bought Bitcoin before its value skyrocketed in late 2017, others lost a great deal of money. You’ll want to do your research before investing in Bitcoin.

Bitcoin and Gold Are Designed for Different Types of Investments

You don’t necessarily have to choose between gold and Bitcoin. Both types of investments can be beneficial, and both serve different purposes. As mentioned above, gold is stable, and it can be a way for you to keep your assets safe.

Cryptocurrency is a volatile market that can be difficult to predict. However, those that have been able to read the market correctly have seen big earnings. Many people that choose to invest in Bitcoin and altcoins also enjoy being a part of the cryptocurrency community.

It can be helpful to look at gold vs. Bitcoin and decide which currency is better for investments. Education is key to smart investments, and if you learn more about these commodities, you’ll be able to find the best ways for you to invest your money.

Why Is Gold Valuable

For many centuries a yellow metal has played an important role. From early ancient civilizations to more modern times, gold has been used for a variety of things. Things such as providing power for a ruler, showcasing status between neighbors, or providing a form of exchange for trade among nations. However, despite its attractive shiny personality, gold metal is intrinsically worth nothing. True, it does have some uses in various electronic applications and dental procedures. However, this precious metal only maintains its value to mankind due to the simple fact that it is gold, nothing more and nothing less.

This is the primary reason why over 75% of the annual global demand for gold is for investment purposes or jewelry and not for any practical industrial use. The bottom line, people, primarily use gold for the above reasons as opposed to a beautiful smile or a conductor of electricity. However, why do they prefer gold and not another attractive metal? Why not use copper, aluminum, iron, or something else?

These are great questions, and they need to be answered. However, the answer is simply based on three properties of gold, durability, scarcity, and malleability. These three properties make gold unique from other metals that exist underneath the Earth’s surface. For example, if gold was as common as aluminum, which is one of the more abundant metals in the Earth’s crust, it would not have the same attraction. On the other hand, if it was extremely rare, like rhodium, which only produces 1/10 of the annual production of gold, then it also would not have a worldwide allure.

An interesting point in a shareholder’s letter from Warren Buffett stated that if all of the world’s gold was accumulated, it would weigh approximately 170,000 metric tons. If melted down into a cube, the measurements would be 68 feet on each side. That cube would approximately fit into a baseball infield. Even though current global gold production is 2% of the overall total, gold still offers a perfect balance of being prized while being relatively scarce. Yes, gold is a lot more than just another shiny rock.

Also, gold is extremely durable. This feature adds to the high status of gold. In fact, one of the unique properties of gold is that it is one of the most durable metals in existence. Gold does not tarnish or rust. If you decide to hide all of your gold in the ground for 50 years, or even longer, you would be able to dig it up and see that it was basically unchanged. An archaeologist once wrote that if you discovered a gold tooth in a 4500-year-old Egyptian mummy, its condition would be good enough to allow you to have a dentist put it into your mouth.

Finally, gold is also very malleable. Gold has the distinction of being the most malleable of any metal in existence. For example, 1 ounce of gold could be made into a continuous sheet that measured 100 ft.². You could also use 1 ounce of gold to make a 50-mile long wire. Therefore, it is easy to see why gold continues to be so valuable?

Welcome to GXP Investments

Welcome to GXP Investments!

Please be patient with us as we finalize our website. You can look forward to dozens of how to articles, practical step by step guides, and other investment tips from our team of investment advisors. We take our clients needs seriously and want to hear your feedback, regardless if it’s positive or negative.

This past year was indeed tough for everyone, some more than others. But we want to turn things around this year and beyond by equipping you with the knowledge to not only invest your money wisely, but do so in a way that can protect your savings and retirement.

While we finish the site, enjoy this video on gold investing basics.