Gold Vs Bitcoin


Bitcoins and other electronic currencies present a new form of investment that’s turning heads across the financial world. While Bitcoins have gained impressive traction in recent years, can this new and unproven market match up to gold?


WHY BITCOINS?

Bitcoin is a cryptocurrency, so called due to the encrypted data used in its transaction. Bitcoin was first created by an anonymous group of programmers known as Satoshi Nakamoto, and was first released as open source software in 2009.

Although cryptocurrencies have become very mainstream, it’s not an easy technology to understand (An explanation can be found here.) However, the important facts are:

  • Transactions are always peer-to-peer, with no intermediary in the transaction.
  • Transactions are recorded in a kind of ledger called a blockchain.
  • Bitcoins are stored in digital wallets, which contain the information necessary to use your bitcoin holdings.
  • Once transferred in a transaction, a bitcoin cannot be reclaimed, essentially making them more secure an online payment format than even the most encrypted credit cards available.


AN INTERNATIONAL CURRENCY

Bitcoins have gained substantial traction over the last few years. The original Bitcoin cryptocurrency has been joined by a slew of other smaller popular but still substantial cryptocurrencies including Ethereum, Binance and Tether.

The value of Bitcoin went through a meteoric rise in the last 5 years, rising from less than $300 in 2016 to over $37,000 in December 2021. In that period though, there have been wild swings where it almost halved in value in just a month in early 2021. This volatility, and the uncertainty around its regulatory status has kept its risk profile high. Some countries have banned it (China) and others have adopted it as legal tender (El Salvador), while others are looking into regulation (USA)


WHY GOLD?

Gold has been used for centuries as a store of wealth and is a currency recognised around the world. Gold has been discovered at the same rate for a long time, meaning its scarcity has not been compromised and its value has remained steady, making it ideal for long-term investment.

Investing in gold can also be tax free depending on individual circumstances. If you invest in Royal Mint minted gold coins which are legal tender you will not be charged any Capital Gains Tax.

What’s more, physical gold has intrinsic value which can never drop to zero – the same cannot be said for bitcoin.

While the advantages of investing in physical gold to safeguard one’s prosperity are manifold, its relevance is in no way diminished by technological advancement. Much like bitcoins, gold sits outside of traditional banking systems and is thereby free of intervention and interference.

With gold you have a physical asset that can be rapidly liquidated, all while remaining safe from economic uncertainty.


GOLD VS BITCOIN

Bitcoin was developed as a way to democratise finance, removing government currencies from transactions while limiting the possibility of fraud and theft. As an investment resource, Bitcoins’ lack of physical form doesn’t undermine its transparency, as investors can monitor “block chains” and online ledgers that visibly convey the cryptocurrency’s value.

value.

However, while the Bitcoin in a digital wallet remains as safe as the owners cyber security defences, there have been many instances of theft on cryptocurrency exchanges with hundreds of millions of dollars worth of cryptocurrency stolen.

Bitcoin has recently been compared to gold because it’s an asset beyond the purview of banks and governments, but Bitcoin’s price volatility and uncertain regulatory future are key differences.

By contrast, gold’s stability is tied up in its centuries-old history as a store of wealth and form of currency, which has led to its status as a safe haven investment asset.

Investment Gold bars


CONCLUSION: GOLD

While both bitcoins and gold have seen impressive growth in recent years, gold’s advantages are clear. As a physical asset that is universally known and highly regarded, its appeal remains greater than any digital alternative.

Gold’s safe-haven status Is perpetuated by governments increasing their stockpiles to underpin their economies in unprecedented times.

Depending on individual circumstances, investing in gold can be a tax free guaranteed legacy you can take forward with you. While both gold and Bitcoins present opportunities to grow your success, even technology’s wildest advances can never completely overshadow the prestige and security offered by physical gold.


HOW TO BUY GOLD & SILVER 

Our Simple 4-step process makes physical gold and silver buying easy.


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PURCHASE ORDER
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STORAGE AND DELIVERY
We can either deliver your gold directly to you, via our insured delivery service, or you can choose to have your gold safely stored, in a London Bullion Market Association (LBMA) vault, where your physical metals are allocated in your name and with full insurance provided.

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