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?
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.
To be honest, it’s not exactly easy for laymen (including us) to understand exactly how bitcoin works. (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 also gained traction in emerging economies such as China, as well as in African countries where more conventional monetary transfer systems exist. Indeed, one in three Kenyans claims to own a Bitcoin wallet.
Interestingly, the number of bitcoins ever able to exist is capped via its computing at 21 million. Roughly 75% of all the Bitcoins that can ever exist are now in circulation, which has caused the cryptocurrency’s value versus USD to skyrocket from around $720 over 2013 to $2,000 + today.
The chief reason one might invest in bitcoins is that their value has increased significantly in a short space of time – 210% in the last year. However, whether they will hold their value is another story. Bitcoins have not been around for long and have a limited track record.
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. If you invest in UK 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.
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 investment remains during the course of the current economic uncertainty. Elements of change such as Article 50, political leadership in the USA and UK, as well as market growth factors in forthcoming superpowers such as India and China will see more and more investing in gold to protect their wealth.
Furthermore, investment in gold ensures that you have wealth accumulated that is free of taxation, with a 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.
Q & A
One of our dedicated specialists will work with you to answer any questions you have. We will provide you with factual information (benefits / drawbacks) of all available products. The length of this conversation is down to you and is an opportunity to ask us as many questions as possible. Please note we are not permitted to provide any financial advice. If you require advice we suggest you speak to a financial advisor.
When you feel confident that you’ve had all your questions answered, you will be asked to complete a purchase order, which is your instruction to purchase metals.
In order to lock in the price and complete your order, you must then make a payment, via bank transfer or personal cheque. We no longer accept any payments over the phone / card payments.
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.