Bitcoin‌ ‌vs‌ ‌Gold‌ ‌in‌ ‌2021‌


January 19, 2021 | AtoZ Markets – Investors are still wondering which asset is worth everyone’s attention this 2021. For many years, two of the most popular assets in this modern-day era never cease to garner popularity.

Bitcoin vs Gold – How They Compare In 2021

Many are curious whether gold or bitcoin can withstand the markets’ volatility, especially during the pandemic. Those who are into diversity may acquire both, but for those who are still unsure, here’s a comparison of the two—bitcoin vs. gold and which areas one dominates the other. 

Limited Supply 

Gold is a form of precious metal, and bitcoin is a digital currency. Their production will give you a rough idea of how limited both are in numbers. Gold undergoes long processes to turn into bullion bars and coins. It also takes a while to mine gold from various locations globally. Moreover, gold is always in demand, and its production and supply may not catch up proportionally. Despite that, as the earth shifts, it produces raw precious metals. It would take a millennium to exhaust the supply of gold on earth.

On the other hand, there are only 21 million bitcoins available for mining, and it may take only 20 years to mine 99% of it. Understandably, bitcoin is priced higher even when gold sites promote bitcoin. However, its benefits outweigh its downsides—especially for those who want a hedge against inflation.

Bitcoin vs Gold - How They Compare In 2021

Intrinsic Value 

If you explore the intrinsic value of each asset, at this point, gold undoubtedly wins. It’s because gold is not just money. Gold can also be in the forms of jewelry, ornamentals, and industrial raw materials. For instance, the electronics industry and dentistry utilize gold for their operations, and its functionality never diminishes.

On the other hand, Bitcoin is an alternative payment for those without immediate access to banking services. Digital payments and blockchains are made possible, offering users more choices financially. This currency can be sent around the world in a matter of seconds without fees.

Liquidity 

While gold has been around for thousands for years and still holds much value today, we are no longer at the time when assets are difficult to liquidate. The internet has made it easier for investors to buy and sell various types of assets. Even when you’re looking for real estate to acquire, you only need to look for listings without leaving your house.

That goes for both gold and bitcoin, since they’re available online. But because of the nature of bitcoin, its ownership and sale do not require shipping and handling fees. The Internal Revenue Service (IRS) doesn’t permit keeping gold at home, and you may suffer repercussions if you do.

Meanwhile, you can exchange bitcoin right away for money, and you can do it in front of your computer screen. In this area, bitcoin outshines gold.

Stability 

Experts are still arguing that while bitcoin overshadows gold’s value, some believe that everything aligns in favor of gold due to its currency growth. Bitcoin can only be considered valuable as long as people acknowledge it. Every four years, its value decreases in half. For gold, the supply and value continue to coexist, without giving much emphasis on its purity.

The projection on gold is looking promising at USD$2,500 per ounce in the future. Its spot price goes higher despite its significant difference with bitcoins. Additionally, gold is traded worldwide and is regarded as a global commodity.

Conclusion 

Both assets have their pros and cons, and the choice is up to you. Asset diversification has saved many investors, especially since all assets come with their own risks. If one goes down in value, the other may go up. At this point, bitcoin vs gold, although not equal in value, are still both valuable in all aspects to this day.

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