Investors have predicted in the coming years it is time for a recession. This is when the economy does a downturn that affects investments. Many investors during this time will seek shelter or more stable safe havens to ride out the downturn. And, that tried and true option in the past has always been gold. According to Lear, when investments soar, gold doesn’t soar along with it, but when there is a drop, gold usually will steadily increase. However, in this new and digital age, we are seeing investors looking at Bitcoin as a safe haven option as well. This is due to the fact that there is a limited supply, like gold which makes it the digital gold of the future.
Bitcoin and Gold Comparison
Bitcoin and Gold have a lot in common. There are limited amounts available in the world. The creator of Bitcoin ensured that there would only be 21 million Bitcoins. Bitcoin, like gold, is not issued by some central banking system. Gold and Bitcoin are both not regulated by the economy of just one country either. They are both very much a global trade. Bitcoin and Gold are very common in that they are rare to obtain and they both are hard to corrupt. This means that you cannot “fake” the system with “fake” gold or Bitcoin easily, as you can with traditional currencies.
Gold is far more liquid than that of Bitcoin. This means that more people are willing to give cash quickly for some gold than they are for bitcoin. The exchanges for Bitcoin can have withdrawal daily limits that are imposed on the owner amongst other things that make it harder to liquidate fast.
Bitcoin’s Nature
Bitcoin is far more volatile in recent years with the spike in 2018 at $20K and then dropping to around $4k per coin. It has since recovered some, but the growth is more slow and steady, similar to what you would expect with Gold. Because of this, some alternative coins that are backed by gold have popped up on the financial option horizon. And, there are other coins that are linked to the US dollar, these coins are known as stablecoins. These coins are similar to the idea of gold backing up the US dollar before the 70s. This is a great option for those that are not so impressed with the volatile nature of the Bitcoin.
Both Gold and Bitcoin have amazing baseline values. From the beginning of time Gold has always had value and was traded across countries and even used as its own currency for some civilizations. Bitcoin also brings a lot of value to people that don’t have the proper banking structures. In fact, there are many parts of the world that don’t have proper banking systems and Bitcoin makes banking possible for them with very little fees.
Gold and Bitcoin are great safe haven investments
Gold is a great safe haven option. It offers limited amounts just like Bitcoin. This means that we cannot simply go and “print” more or make more gold or bitcoin. Whatever the amount of the mineral is here on Earth is all we have. It is very valuable in manufacturing and offers all kinds of uses. Bitcoin is very similar in that it offers many people around the world a way to safely bank and brings value to the table with its ease of use. It too is recognized around the world as something of value. Because of these reasons, Gold and bitcoin are both pretty great places for a safe haven investment.
