With the changing times and increased uncertainty, are we still into the phase where we are thinking of putting our money into gold whether the recession is going on or not? Due to Global Pandemic, a situation of recession came into the market. But it is your capability of tolerance of risk that decides whether to keep your money invested where it is or shift to gold (a traditional way of investment). The stocks kept on fluctuating, while most of the time it was losing their value because of the reasons of Global Pandemic, Recession was taking place.
At that point, the financial investors thought of investing their money in gold instead of stocks because of such high volatility. Then investors noticed a currency named Bitcoin, which hardly had any fluctuations at the Global Pandemic. Gold certainly provides a lot of security for investors, whereas Cryptocurrency (like Bitcoin) does not provide that much safety to its investors.
What Are Bitcoins? Here Is An Overview
So, what are Bitcoins? Bitcoins are digital currencies that are traded on cryptocurrency exchange platforms; one of them is Bitcoin transactions. Bitcoin is just one of them, while others include Dogecoin, Ethereum, etc. Listed below are the points of differences which can make you understand better which way of investment to go for-
Gold is far more transparent than Bitcoin. In many countries, the borders cannot be crossed without special permission if you are carrying gold with yourself, so there is no way that it can be stolen or theft can occur. So likewise, you can decide which way to opt for investment.
- Volatilite Nature
As mentioned above, gold is not a volatile source of investment, whereas Bitcoin is. Bitcoin has still not become popular amongst the investors, whereas gold being kept as a way of investment has been coming forward as an age-old tradition.
- Central Bank
Central Bank also recognizes gold, and it is the currency of the Central Bank only, whereas Central Bank does not recognize Bitcoin.
- Liquidity purposes
There are times when we want to diversify our portfolio with something very liquid. In the case of Bitcoin, it is not that liquid, whereas gold is the best way to invest in case you want liquidity in the asset you are investing in.
- Point of utility
The utility of an asset helps them sustain their value in the future. The common point they have is that both of them are finite in number. Their availability is only limited. Also, both Bitcoin and gold are rare. Talking about Gold, it is one of the most precious forms of metals. Alternatively, when it comes to Bitcoins, it is one of the most popular forms of cryptocurrencies that can be traded using hundreds of exchange platforms.
Gold and Bitcoin are equally good for investment purposes. Gold is better for conservative investors, whereas Bitcoin is better for investors willing to take risks. Each investor enters the market for investing with a different mindset. Their preferences are different. At the same time, most investors have one thing in common: they want to diversify their portfolios because they do not want to put all the balls in the same basket. Investors are still sceptical about whether to invest in crypto or not.
Bitcoin Mining has been banned in China, which results in even stricter regulations for crypto investors. If the investor can take that uncertainty, they go for crypto, but if not, they end up investing in gold as it provides a hedge against all the possible losses.
The above-mentioned few points while you are considering your decision for investing. Whereas everything comes down to your preference, you can ask yourself a few questions to gain some clarity: How much is your risk tolerance factor?
Whether you want the asset you should be investing in should be highly liquid or not? So these answers differ from person to person, so you can take the article of above-stated points and go on your judgments as well. Ensure following up with these mentioned above points so that you can make a right choice to invest in an ideal form of traded asset.