Every newspaper heading you read from November 2020 onwards mentions gold’s falling prices. While this has led to many investors (who are heavily invested in the yellow metal) feel scared, it is important to understand the underlying reasons for the same.
There is something very interesting taking place in the world’s financial and economic systems in the past few months. We all know how the pandemic has accelerated fears of inflation following the stimulus spending of major world governments.
Relief has been distributed on an unparalleled level to help populations affected the worst by the pandemic. Given such a scenario, you would imagine gold to emerge as the strongest hedge. However, that has not happened.
Bitcoin: The New Digital Gold
Analysts and experts are unanimous in their answers regarding how Bitcoin has been able to outshine gold and emerge as the most preferred hedge during the crisis.
Bitcoin has grown by over 200% this year alone, leaving every other investment in its digital dust. Everyone from billionaires to Wall Street investors wants it. Not to mention normal families and professional individuals who have seen their fortunes treble in some instances in a matter of months!
Many states that Bitcoin runs on the scarcity model of gold and has been positioned as a counter to the inflationary practices of governments. With currency devaluations all but certain following fat stimulus cheques, Bitcoin continues to rise to record levels in December 2020.
This has made many investors who would otherwise opt for gold, go for Bitcoins or other promising cryptocurrencies. While questions about the legality of the same abound, most countries are now accepting and offering mainstream banking facilities for Bitcoins.
Should you Stop Investing in Gold Completely?
As an investor, the first thing you are taught about is diversifying your portfolio. This helps balance out the rise and fall in the various asset classes.
No! You should not completely abandon Gold as a form of investment, and as an asset to protect against inflation.
What you should instead do is balance the number of investments between gold and Bitcoins depending on your budget and resources. If you had not been investing in cryptocurrencies, now would be a good time to start.
Gold will hold value, and bounce back. while January or February will be too early, gold can recover by November or December. It has historically been the safest option to protect investments and the same will hold true, according to experts, no matter how much Bitcoin continues to shine in value.
Gold Versus Bitcoins: Where Investors are likely to crowd for Long-Term Goals?
The answers you are likely to get when you pose this question to investors are likely to wary or be split down the middle. Even though many billionaire investors are already invested in Bitcoins, they would not want Gold to fall too much.
What they would ideally prefer is a scenario where Gold gives them security and Bitcoin gives them growth. If you follow closely as to what is happening in the world today, you will realize that such an ideal scenario is already in the works.
In terms of long-term investments, gold already has a proven track record. Governments too are invested in the same and will not allow for too much variance in terms of prices.
On the other hand, when you look at Bitcoin, the rate of growth the past few years has no doubt been huge, but the price fluctuations have managed to take some of the sheens away.
The Final Word
Both Gold and Bitcoin continue to enjoy a fan base as far as long-term investments are concerned. Yes, the falling prices of gold are a cause for worry, but correction is expected in the near future. If you wish to invest in Bitcoins or any other cryptocurrencies and are looking for a credible and reputed trading platform, please visit- cryptopolitan.com
HussaiN is a full-time professional blogger from India. He is passionate about content writing, Tech enthusiast & computer technologies. Apart from content writing on the internet, he likes reading various tech magazines and several other blogs on the internet.