It’s time to get rid of the misconception that gold and Bitcoin are at odds with each other. Gold, historically viewed as a stable investment, is often cast in sharp contrast with Bitcoin, which is criticized for dramatic price fluctuations and market volatility. But what is missing in this incorrect comparison between the two is a look at the larger context. Specifically, gold has been around for thousands of years, and has therefore had a much longer time to demonstrate its value as an alternative asset, while Bitcoin only came onto the scene in 2009. So it should be expected that whenever there is a new currency and technology introduced, it will take some time for the dust to settle.
Indeed, while Bitcoin experienced a meteoric rise in price in 2017 (over 1300%), the cryptocurrency space as a whole has faced increased volatility in recent months due to increased regulation from the SEC as well as with online advertisers such as Facebook and Google. However, we believe that the setbacks on Bitcoin’s price will only be temporary, as greater regulation is indicative of mainstream adoption, and helps filter out the bad actors. Furthermore, the technology powering bitcoin and cryptocurrencies as a whole is continuing to evolve, cementing crypto’s influence and staying power in the financial sector and beyond.
The reasons I think gold and cryptocurrency are assets with a symbiotic relationship are listed below:
Gold and Bitcoin’s Scarcity Protects Against Inflation
Unlike fiat currencies, in which governments can print as much money as they see fit, gold and Bitcoin have a finite supply and cannot be produced at will. While the precise gold supply remaining is unknown, there are a definitive 21,000,000 Bitcoins that can ever be mined. The limited supply of both assets makes them immune to the inflation and hyperinflation impacting such countries as Venezuela (a country where demand for Bitcoin is surging).
Both are Reliable Resources Removed from Economic and Global Unrest
Both Bitcoin and gold are removed from the stock market, making them a valuable hedge against economic unrest. In the recent months, we saw patterns of investors turning to cryptocurrencies (as well as gold, and other alternative assets) when the market dipped.
Furthermore, when fiat currencies struggle as a result of global unrest, alternative assets such as gold and bitcoin rose in value. Some examples of this recent years include the European debt crisis in 2013, when Britain voted to leave the European Union in 2016, and last year, in 2017, when there was rising tensions between the United States and North Korea.
Digital Gold: Bringing the Best of Both Worlds
At BitcoinIRA.com we recently launched Digital Gold, a cost-effective, convenient, and secure way to invest in physical gold using blockchain technology.
We recognized that many of our customers who were looking to invest in Bitcoin and other digital currencies were also, simultaneously, gold investors. However, gold is expensive to purchase, transfer, and store. With Digital Gold, we have launched a new product that incorporates the best of both worlds: the stability of gold with the speed and security of blockchain technology.
Bitcoin and Gold: Better Together
Ultimately, diversified portfolios minimize risk and maximize return on investment. It’s time to stop pitting gold and crypto against one another and recognize the two complement one another in a well-balanced retirement portfolio.
About the Author:
Chris Kline, Chief Operating Officer, BitcoinIRA.com
A Denver, Colorado native, Chris Kline joined Fortress Gold Group as a partner and Director of Operations in 2012. Chris drove the operations strategy and execution that lead to the company becoming an Inc 500 leading provider in gold and silver for IRAs. Following his success in precious metals, he was challenged to develop a way for individuals to directly invest in Bitcoin for retirement.
Together with Camilo Concha and Johannes Haze, Kline co-founded Bitcoin IRA, and Kline then developed the process and exclusive partnerships to create a full-service, turnkey solution allowing investors to capitalize on the rapidly growing digital currency market space for their retirement portfolio while maintaining full IRS compliance.
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