Bitcoin (BTC) vs. gold: which one to buy and why?

In the very VIP club of financial investments that secure funds appears, you can count gold in its physical form.

This nugget of profitability that expresses its strength especially in troubled times of economic crises. A formula which has left the dark corners of our chimneys, but which remains at the center of the safeguarding of our heritage. A position that is nevertheless increasingly being seriously challenged by its cryptomonic version in the form of Crypto Bank or what its enthusiasts like to call digital gold.

Finding the right investment is a concern for many investors, especially when it comes to securing financial assets. That is to say, to offer it the possibility to develop without having to fear losing everything. A requirement that leads many of the most serious of them towards traditional solutions, such as gold or other precious metals.

An option that has proven itself and whose reliability has stood the test of time, but which does not only have advantages, especially concerning its storage, which must be delegated to a third party structure. This always represents a risk of not being able to access them at your convenience, or even not being able to retrieve them at all in the event of a major problem. All of this comes with returns that – even important – are not (or no longer) among the most interesting in the field.
Investing your capital in gold

Gold represents the secure investment par excellence, because it brings a material option to investments that are often very abstract when it comes to silver, even though there are few investors in the field who have touched this precious metal with their hands.

A very relative security that corresponds to a somewhat archaic vision of finance, and whose returns are regular, but not (or more) among the most important that it is possible to obtain.

A purchase in the form of a rescue, and whose price rises each time a major disaster shakes the planet. All this is driven by a rarefaction of the available quantity, which is not unlimited. This fact is recently supported by the World Gold Council, which is the world’s gold observation agency. The latter informs that gold production is expected to decline by 20 to 25% in the coming years. In fact, there would be no more than 50,000 tons of gold left underground, equivalent to a quarter of the quantity extracted to date and 15 years of operation at most.

This reality is clearly in line with a planned increase in its price. Nevertheless, it is not the only asset it has up its sleeve. All of this is based on a market that relies solely on the strong demand it generates and which is not as secure and robust as some would like to believe.

„Gold has a higher intrinsic value, but the value at which it is traded is extremely overvalued relative to its actual uses. (…) If you take a long hard look, you can say that gold is a bubble, just like Bitcoin, except that his is several millennia old and that’s why people trust it. „Alexandre Delaigue, Professor of Economics at the University of Lille I

Taking advantage of the benefits of Bitcoin (BTC)

One observation allows us to consider Bitcoin (BTC) in a new light and to confirm its place in the VIP square of crisis investments. This is all the more valid when we see that its price has a strong tendency to correlate with that of gold, for example during major movements resulting from global crises. Of course, this is accompanied by a completely different return.

Indeed, even if the price of gold is rising steadily, it is nothing compared to that of Bitcoin over the same period. You only have to look at the evolution of the price of an ounce of gold against that of BTC. This is to be considered since the first halving of the BTC in November 2012.

An exchange was trading at 139 BTC per ounce at that time and has fallen to only 0.146 BTC/ounce currently, a price almost divided by 1,000 against the BTC, while the price of an ounce of gold has increased by only 27%.

All of this has been fuelled by a scarcity that is also unique to bitcoin, which is limited to 21 million forward units. This makes it the deflationary currency par excellence and the main tool for its programmed rise since its introduction.