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Bitcoin Vs Gold: Which is A Safer Investment?

Bitcoin is often dubbed as “digital gold” because it was created as a digital asset based on cryptographic principles that mimicked some of gold’s unique properties like limited supply and high value. Given these similarities, it is but natural that people frequently pit these two assets against each other. Today we answer one of the most frequently asked questions in the crypto world: Bitcoin vs gold: which is a safe investment?

Before we delve into a detailed comparison, let us first understand what we mean by a safe investment. What is “safe” varies from investor to investor and depends on his/her appetite for risk. Complete guarantee of safety is nearly impossible for any kind of asset because a 360 degree understanding of the market, which is essential for such a guarantee, is hard to come by.

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Having clarified that, safety of an investment is gauged against its stability in the short and long terms, to make sure the investor to recoup the funds invested.

Bitcoin or Gold: Which is A Safer Investment?

If we are to go by the issue of safety, then gold, the old crowd favourite, takes the point from Bitcoin.

For a number of reasons, including but not limited to its long history and reputation of operating as a dependable asset, gold is seen as a safer investment, if not better.

The following factors happen to give gold the age over Bitcoin:

Low Volatility:

Gold has a far lower degree of volatility than Bitcoin. This means that its price does not fluctuate nearly as much as that of Bitcoin.

If you have ever wondered why the price of Bitcoin moves so much, then volatility is the answer, arising from issues like fluctuating market demand, investor mindset and so on.

Gold, with years of history as a reliable asset does not need to deal with this issue as much as Bitcoin does. The value of gold can never fall too low but Bitcoin’s can.

You May Also Read: Bitcoin Price History: An Overview

Established Reputation

Gold, as a limited-supply precious metal, has centuries of reputation behind it, which Bitcoin lacks. For years, people have trusted gold as their traditional mode of investment and this psychological edge is not going away soon.

Greater Applicability

The fact that gold is a precious metal that can be used for purposes other than investments (like ornamentation, medication etc.) hikes its value considerably. In comparison, Bitcoin often tends to pale.

Security of Storage

Gold, stored in a physical location, is often guarded more easily than Bitcoins stored in an online wallet.

Although there are way to secure crypto wallets, online wallets always run the risk of hacks and thefts. Cold wallets can reduce it to a large extent but they are not used by every crypto holder, thereby compromising the security of crypto holdings.

For these reasons, gold is a more safe and stable investment to go for, if not necessarily better.

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