Gold versus Bitcoin in 2017: Who Will Win?

Both Gold and Bitcoin are considered to be safe havens in today’s market. These assets are two very watched financial assets at the moment. Hence it is Gold versus Bitcoin in 2017 with the big question who will win?

28 March, AtoZForex  In fact, both Bitcoin and Gold are being grouped together as of late. Following the day when they both traded at the same price, March 3rd. However, if you’re a savvy investor, you know that one will likely to prove to be better than the other. So, who wins 2017? Today, we’ll talk about gold and Bitcoin and do our best to answer that question.

“Bitcoin’s Value Lies In Euphoria”

When gauging the difference between Bitcoin and gold, it’s important to understand the euphoria surrounding Bitcoin. You see, Bitcoin is largely considered to be a bet against central banks. As a decentralized currency, Bitcoin is a way of going against the world of finances. The truth is that as human beings, we seem to have a desire to go against the grain, so, doing so creates a bit of a euphoria among those that use Bitcoin.

The Evolution Of Bitcoin since 2008

Invented in October of 2008, Bitcoin has quickly taken the market by storm, and for good reason. You see, when inventing Bitcoin, the founders displayed it as a way to keep assets safe from poor choices made by central banks. This decentralized currency would soon become a big topic of conversation. After all, central bank manipulation, bad mortgages, and generally bad money management in the financial sector led to the 2009 financial crisis.

As Bitcoin became more popular, the euphoria around owning the seemingly meaningless virtual currency gave it the meaning it needed to actually gain value. Once that value was understood, people started investing in Bitcoin all kinds of ways. They would buy and hold it, day trade it, and even get into Bitcoin options trading.

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Bitcoin expectations through 2017

Bitcoin did not change the world, Bitcoin plunges after cyberattack, Is Bitcoin money, Is Bitcoin safe, Bitfinex reports Bitcoin hackGold versus Bitcoin in 2017, is the cryptocurrency a match? Throughout the first quarter of 2017, many are forecasting that the value of bitcoin is going to climb. There are a few reasons for this…

1. Growing Usage – At the moment, it is clear that the popularity and usage of the virtual currency increases. This can be seen by the number of Bitcoin ATMs that are popping up around the world. In fact, by November of 2016, Bitcoin had a total of 838 ATMs around the world. That number had grown from just 538 in January of the same year.

2. Central Bank Changes – This year, many are expecting to see quite a bit of movement from central banks around the world. Increasing interest rates in the United States, stimulus packages in Japan, and more have the ability to steer consumers toward the virtual currency.

3. Economic Concerns – Finally, there’s quite a bit of concern around the global economy at the moment. With Donald Trump changing global trade agreements with the United States. While the UK will trigger Article 50 tomorrow, many are expecting that Bitcoin will gain in its safe haven status against. Especially, as an asset to go against the current and ongoing economic concerns.

How Does Bitcoin Stack Up Against Gold?

Gold outlook after Trump Presidential Inauguration 2017, Trump Victory Takes Gold market, trump-victory-takes-gold-market-by-surpriseGold needs no introduction. In fact, the commodity has history that dates back thousands and thousands of years. Not to mention that to date, it remains one of the most valuable commodities in the world. So, is there really a comparison here? Who would win in a competition; Gold versus Bitcoin in 2017? In my opinion, the answer is no! The truth is that when it comes to strong safe haven investments, Bitcoin is simply inferior to gold. Here are a few reasons why…

  • Something Real – First and foremost, gold is something real. When you purchase gold, you know you have it because you get to hold it. On the other hand, Bitcoin is simply virtual. Sure, there’s a balance sheet that shows what your bitcoin are worth, but if anything happens to the virtual bank holding your bitcoin, well, then the bitcoin is worthless. In fact, massive amounts of the virtual currency have gone missing out of the blue in the past and there was nothing anyone could do about it.
  • Market Value – Another factor here is market value. So far, there are 180,000 tonnes of gold above ground. That puts gold’s market value at around $7 trillion. Bitcoin on the other hand has a total market value of about $20 billion… far lower than the value of gold. On top of that, gold has had thousands of years to prove itself while bitcoin is in its infancy!
  • Bitcoin Is Being Commoditized, But That May Change – At the end of the day, it seems as though investors are using Bitcoin as a commodity. However, that is purely psychological. At the end of the day, it will never be a true commodity. Any major shift in investor opinions about its state as a commodity will cause headwinds ahead. On the gold side of the coin, we know that gold is a trustworthy commodity.
  • Going Against The Grain – Bitcoin is decentralized. Hence, it feels good for investors and consumers to buy it. As mentioned above, humans are wired to go against the grain. However, going against the grain only feels good for so long. At the end of the day, centralization provides a layer of protection, and that’s protection that bitcoin simply doesn’t have.

The Bottom Line: Gold versus Bitcoin in 2017

Gold Versus Bitcoin in 2017 Chart Gold Versus Bitcoin in 2017 Chart (Click to zoom in)

Coming to the conclusion of the Gold versus Bitcoin in 2017 question. I have to say that Bitcoin is definitely an interesting concept. Bitcoin is in no way comparable to gold. At the end of the day, considering the headwinds that are likely for bitcoin ahead, the solid facts when we take away the psychological comparison. Along with the overwhelming trust for gold, my bet is; gold wins this race!

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