In recent months, experts have insisted that Bitcoin is a safe haven superior to gold. The recent financial crisis and the economic fallout that has followed have led many people to look for the best store of value available. Popular author and entrepreneur Jeff Booth recently commented: “Once this has happened, the benefits of BTC will become extremely important. In times of peace and stability, both gold and bitcoin have produced phenomenal deflationary assets.
Booth believes that Bitcoin is much better than gold, because while gold can be stolen and confiscated, the portability of Bitcoin is of paramount importance for security reasons alone. While most experts do not discourage gold ownership, more and more experts believe that Bitcoin has proven to be a far superior safe haven, as BTC is more portable and secure than gold. One firm has predicted that Bitcoin will replace gold not as the ultimate store of wealth, but as an alternative to it. There has been a lot of debate about how Bitcoin is compared to gold and safe-haven assets.
It has been placed in trust by society, but has behaved in a way that limits its usefulness as a store of wealth, owing to its limited utility and lack of security.
For this reason, journalist Nathaniel Popper has shortlisted his book on the cryptocurrency Digital Gold. He even spoke of “digital gold” because it offered a safe haven.
Although central banks are decentralized – i.e. planning, organization, policy, and their products are distributed from a central location or group – they can still manipulate prices.
Bitcoin, on the other hand, can behave like gold, because it is not issued by a central bank or federal government. Experts believe that gold and bitcoin will be the “money to use” when global political and economic prospects are uncertain. Gold and Bitcoins are finite resources, while central banks can print more money to boost the economy during periods of economic crisis such as the 2008-09 financial crisis.
In the decentralized cryptocurrency, Bitcoins are created by people who work to verify transactions that take place on the Bitcoin network, and are then rewarded with Bitcoins for their time, computing power, and effort. To ensure that the final bitcoin is not issued before 2140, and to ensure that the market is not flooded, the Bitcoin protocol requires that this reward be periodically halved.
Bitcoin, commonly referred to as “digital gold,” has historically been seen as a risky speculative investment for those seeking short-term gain. Although Bitcoin was only launched a little over a decade ago and has only gained widespread recognition in recent years, gold has dominated the safe-asset arena for decades.
Now, the recent rise in the price of bitcoin, underpinned by a massive rise in its value in recent months, has led some to question the accuracy of these old assumptions about the asset. Given the digital currency’s dizzying rise, insiders have asked 10 experts whether they would prefer to hold bitcoin or gold for the next 10 years.
One of the biggest reasons Bitcoin has soared this year is probably more to do with the fact that investors have realized that the cryptocurrency is much more than just a digital currency, but also a store of value. As such, Neuman believes that Coinbase, a crypto-company like PayPal that now allows its users to trade and hold bitcoin on its platform, could be an even better bet than gold. Bitcoin advocates also point out that it is likely to remain attractive to investors who see it as a store of value in times of inflation.
The same principle applies to Bitcoin, and the rise in demand and value has led more people to believe that Bitcoin is a store of value because it shares and improves the properties of gold.
According to the Bitcoin Protocol, there are only about 21 million Bitcoins in circulation, and gold’s market capitalization is currently about $10 trillion. Based on the hypothetical replacement of gold with bitcoin, the price of a bitcoin could be estimated at about $470,000. In other words, cryptocurrencies could potentially replace gold as the ultimate store of value for the world’s wealth.
The Internet currency has become the ultimate store of value for global wealth, enabling secure transactions and a source of financial stability and security.
The cryptocurrency’s meteoric rise has piqued interest in it, but, judging by last year’s movement, it remains another speculative, volatile, and risky investment.
Some of our customers have asked us if Bitcoin could eventually replace gold, so we decided to finally share our thoughts. We believe that Bitcoin will stay here but will not be able to replace it as the ultimate store of wealth or even as a safe haven. Gold is unlikely to lose its popularity in the near future, but it could lose its asset status – the safe haven.
