Is bitcoin better suited for long-term investment than gold?

In the cryptocurrency circle, investors often refer to bitcoin as digital gold, but as a long-term investment strategy, how can bitcoin be compared to gold. In other words, is bitcoin more worth investing in than gold?

The emergence of high inflation data over four decades and an increasingly tough global economy has prompted many to recommend investing in gold. This is to prevent volatility and the possible depreciation of fiat currency. Gold is an asset and you can invest your funds in gold to get a good return.


Let’s take a look at why bitcoin can be a more worthwhile investment option than gold.

2017 was the eighth consecutive year in the bull market. But skeptics warn that this can’t last forever, and some even think we’re reflecting on the great depression. Since then, those who don’t want to completely escape stock market volatility have invested in gold. Similarly, bitcoin becomes one of the popular choices as gold. In fact, due to the weaker relationship with all other asset classes, many people in the past called bitcoin digital gold.


What should a savvy investor do?

Traditionally, gold is used to hedge against stock market volatility. This has proven to be an effective approach in the past, but new options are challenging old-fashioned shelters. These differentiations, along with the support of voice and loyalty, make bitcoin an alternative that can safely reduce inventory risk for consumer goods such as jewelry and electronics are considered to be very valuable and scarce.


How can bitcoin be valuable?

Currently, the price of bitcoin is close to $4,000, but how can it be valuable? More importantly, should those who invest in stocks consider investing in cryptocurrencies? Like gold, there are only a small amount of bitcoins available in the market. It must be mined, but not with mining equipment. Instead, digital currencies are mined with the total computer capacity of a vast network of users who process transactions in small amounts of bitcoin on the blockchain. Under the upper limit of an estimated 21 million bitcoins, demand has amplified the price of cryptocurrencies.

So far, bitcoin is a digital speculative tool and value transfer tool. But it is very difficult to buy things like money, and its usefulness as money is limited. In the case of popular support, being a fully believing currency is price-positive, but the opposite is also true. BTC (bitcoin) is the oldest and most sought-after cryptocurrency with the highest market capitalization for investors, developed by Satoshi Nakamoto in 2009.

Last year, many listed companies such as MicroStrategy, Tesla, and square bought bitcoin. PayPal to take the lead in opening up the bitcoin payment function in early 2021. It is a secured investment option for investors.


The dominance of Bitcoin due to blockchain

Technology expansion and blockchain technology have now been recognized by the world. Inspired by bitcoin, the world’s major economies’ central banks have approved the process of developing cryptocurrencies, which further pushed up the blockchain technology premium of bitcoin.

The traditional financial system must be used as intermediaries through banks. And all transaction records will be connected and deposited in the banking system. This is centralization. But the blockchain gets rid of the centralized regulatory system and the banking and financial system and adopts a distributed bookkeeping method.  So, bitcoin cannot get affected by inflation.


Mechanism of Blockchain

The so-called blockchain is simply a distributed accounting method. You can think of it as a super large database with a super long ledger in it. The user’s information is packaged into blocks and miners can add such blocks to the network.

All transaction records are propagated to every node of the blockchain. So that each user is connected and influenced by other nodes. Thereby forming a huge network ( where no one or institution can modify these records). This is decentralization. Although bitcoin is currently in a bear market, bitcoin still has this greater upside opportunity over gold for investors over a multi-year time frame.


In Conclusion

You have to admit that bitcoin is changing the world’s investment strategy. This year’s Russian-Ukrainian conflict event has fully demonstrated that bitcoin is very effective in hedging, and it is still possible to achieve the effect of everyone buying bitcoin, but it is firmly believed that the blockchain can have the ability to change the world. Modern investors will be smart to keep a small number of two accounts. But we should also be careful of blind investing in currencies with an opaque future. Novice traders can kick start their trading journey with the bitcodes-ai .


Leave a Reply