Cryptocurrency vs. Gold

You must have heard people referring to crypto as digital gold. Is it true? Is crypto as valuable as gold & how does crypto compare with gold? Well, let’s find out.

Stability


Gold as an asset is pretty stable. The price of gold steadily dips or surges over the months. However, this is not the case with cryptocurrency. cryptocurrency is quite volatile in nature. Now, there are quite solid reasons behind that.

Take gold, for example. There’s a limited amount of gold out there. Also, it’s being used for various purposes, which is why its value remains almost stable all year long globally.

However, it’s not the case in most cryptocurrencies. After all, miners can mint Bitcoins on a whim. This can cause inflation as more supply will ruin the overall value of Bitcoins or crypto. In a nutshell, you can say crypto is a less stable option than gold.

Value Paradox


Gold is a finite resource. It’s used in electronics, jewelry, medical equipment, etc. This regular usage helps create a stable supply and demand in the case of gold. It’s the reason gold has a stable value, and there aren’t any unexpected speculations.

However, in the case of crypto, it’s different. Most people buy crypto to gain profits by trading. Now, this is a complete paradox as it defies the purpose. The purpose of crypto is to replace the existing financial system and act like one.

Instead of using crypto as a mainstream financial system, people are using it to earn profits, and that’s it. This reduces the overall worth and value of crypto. However, with time it’s expected that people use it wisely.


Investment


When it comes to investment, everyone looks for a low-risk option. However, with low risk comes low profits. If you consider cryptocurrency, it’s more volatile than gold or stocks in the stock market. It’s the reason the value of crypto touches the top on one day and drops to half a week later.

Consequently, some people end up making fortunes while others end up losing their money. This is something that keeps the old or experienced investors away from investing in crypto. Although you can learn more, start small, and play safe with crypto, it’s risky.

However, if you consider gold, it offers better stability. Gold is a limited commodity which you can buy online or even from outlets. As there’s a balance in the demand and supply, the value of gold remains stable all year long.

You can purchase gold and hold it all year long and then sell it for profits. It’s not that gold is not risky. Everything out there involves some amount of risk. However, gold is safer as compared to crypto and is expected to remain that way until crypto becomes mainstream.

In a nutshell, if you want quick profits, you can always opt for crypto. And for long-term returns, gold is the best option.