Cryptocurrency vs Gold

The days of simply throwing money into mutual funds or individual stocks and hoping for the best are gone.

You can no longer rely on elected officials and central banks to safeguard the value of your investments.

And, the truth is politicians are good at spending your money and international turmoil is making paper money worth less and less over time.

Investments that are based on dollars are now more risky because the dollar has less purchasing power than it did a few months ago.

Are you looking for ways you can SAFEGUARD your hard-earned dollars against INFLATION and MARKET VOLATILITY?

Well, begin by gaining an understanding of your investment options.

There are a few intriguing ways to ensure your portfolio does not completely rely on the value of paper money. One way is to invest in hard assets that have long-term growth potential. Another option is to use digital assets, which allow you to take advantage of one of the biggest paradigm shifts in the exchange of value in a generation.

These investment opportunities are, of course, GOLD and CRYPTOCURRENCY.

Even though there are important differences between gold investing and crypto investing, both gold and cryptocurrency are commodities that can provide portfolio diversity and protection from the wild inflation fluctuations of fiat currency.

If you are considering two different options, one of which might make more sense for your situation, then you might decide that one option is better. Also, you might decide to invest in both gold and cryptocurrencies to further diversify your portfolio.

Here’s how the two opportunities compare with each other in a few important areas:

Fluctuations In Price

Over the long term both the crypto market and precious metals like gold have a history of increasing value.  But, neither of these investments are without risk and the higher potential gains almost always come with higher risk. Understanding your risk tolerance is important when investing in any opportunity.

Cryptocurrencies, like Bitcoin, have a higher potential for volatility than gold. This means that the value of cryptocurrencies can go up and down dramatically more than the value of gold. So it’s important to keep in mind that cryptocurrency values are more likely to experience dramatic ups and downs than gold does.

Cryptocurrency prices are much more volatile than gold, however with that volatility comes much greater potential for higher gains in the short term.

It’s important to be realistic about how much risk you are willing to take on as an investor before you make a decision on whether crypto or gold makes sense for your financial goals.

Investing a portion of your overall portfolio in both gold and crypto can help you hedge your bets against market fluctuations.

Regulations

A noted benefit of both gold and crypto is they have safeguards against being stolen or counterfeited simply by the inherent nature of each asset. This is due to how each commodity is produced and sold.

However, there are differences regarding how each one is regulated.

Since gold and precious metals have been a store of value for many years, a system is in place to allow for safe and secure investments. The best way to protect these transactions is to deal with an authorized broker.

Cryptocurrencies rely on technology. They can be bought and sold on centralized exchanges or can be sold anonymously through decentralized platforms. This means it is difficult for governments to effectively regulate transactions. Additionally,  each transaction is executed on the blockchain and is highly encrypted, which means that you can take comfort in knowing that the transaction is secure.  However, with fewer regulations and decentralized platforms comes more responsibility on your part to make sure your purchases and transfers are being sent and received to the proper wallets. The best way to make sure you are purchasing your crypto properly is to use a reputable exchange or crypto investment agency.

Real-World Uses

Paper money or Fiat money is essentially backed by the faith consumers have in the federal government. This is because paper money has not been backed by a gold standard for more than 50 years.

Gold and cryptocurrencies both have intrinsic value, meaning that they hold their own regardless of how the market performs.

Gold has been valued for its aesthetics when used to create precious objects like jewelry for centuries.  and recently gold has value for its technological properties in the design of components used in electronics like cell phones and computers.

Cryptocurrencies have grown rapidly in their use as both a form of currency and a store of value. They are digital or virtual tokens that use cryptography to secure their transactions and to control the creation of new units.  Crypto coins are decentralized, meaning they are not subject to government or financial institution control. Although crypto is a more recent development, it has already earned a reputation as being versatile and useful for conducting transactions online and in the physical world.

Which investment is the best investment for you?

As the values of both gold and crypto continue to trend upward, it’s important for investors to learn about each one’s potential benefits in order to make the best decision for their personal investment portfolios.  You will need to understand both the risks and opportunities of both before deciding if one or both are right for your investment.  One thing is clear, keeping your hard-earned money in the bank is a sure way to lose value. Between inflation and the minuscule interest rates offered by banks, it’s important to have at least some of your money invested in assets that offer a better rate of return.