Bitcoin and gold have some similar qualities, which is why they are often compared. The yellow metal has been used in our civilization for centuries as a way to
The same can be said about bitcoin. Of course, cryptocurrency is not a tangible asset. But the number of bitcoins that will be in circulation is also limited. And the blockchain technology, which underlies the exchange of virtual coins, is able to confirm the ownership of digital money, it has value in itself, it is being tested for use in various industries.
Crypto assets are easy to store, which cannot be said about the metal. Gold in any form (sand, ingots, coins) requires organizing your own storage or renting one, which is not cheap. Bitcoins can be kept on a flash card, they do not take up much space.
How to save wealth
One advantage of holding assets is that they are not correlated with other assets. Simply put, their prices do not depend on the stock and bond markets, price trends develop in their own direction, independent of other areas. And if in some segment of the economy there is a recession, a collapse in prices, then such assets, as a rule, do not become cheaper. On the contrary, they help support the value of the investment portfolio in which they are invested.
There is a significant difference between gold and bitcoin in their ability to store and increase wealth.
For centuries, gold provided a wealth of wealth that rose in price with inflation. Bitcoin is still such a new asset that there is not enough evidence that it can store wealth in the long run. This cryptocurrency, like all the others, is at the initial stage of its existence.
Bitcoin is an unstable, volatile asset, it is only suitable for risk-tolerant investors. And no one will undertake to predict how much it will allow to preserve wealth in the long term.
Over the past weeks, several major analysts have spoken out about the rise in the price of bitcoin, some believe that by the end of 2018 it will cost $25,000 per coin. If we knew that these predictions would come true, coins could become an attractive investment asset in the short term.
Much to be done
In general, virtual currency is too underdeveloped at this point in time to become a replacement for gold. If this happens, it will not be in the coming years.
Gold has been a key asset for so many centuries for a reason. It really works as an asset preservation tool. Bitcoin has become noticeably more popular in recent years, but its degree of acceptance by society is still small. And no one will undertake to guess what will happen in five or ten years, whether bitcoin will remain the main cryptocurrency in the world, whether it will give way to more functional and developed competitors.
Now virtual currencies are speculative assets. And until this state of affairs changes, one should not think that they will replace gold in the short term.
Post a Comment