Bitcoin vs. Gold: Which is the Better Investment?
In October, gold experienced its seventh consecutive month of decline - the longest streak on record. But what about Bitcoin?
It has been a tough few years for investors, with most assets taking a beating. The cryptocurrency industry is no different. Bitcoin, for example, is down by about 70% from its peak in November 2021. While it's been painful to watch portfolios take a hit, there are some silver linings. For instance, many investors see this as a buying opportunity, scooping up assets at a discount.
One would assume that, given its reputation as a hedging choice in times of uncertainty, high inflation, and wars, gold would have been the top performer this year. However, its price movements for the past seven months tell a different story.
Gold's 7-Month Red Streak: Here's Why Prices May Be Headed Higher
The precious metal has long been seen as a hedge against inflation, given its history. However, looking at its chart against the dollar, it is clear that this is no longer the case. The removal of the gold standard has made it clear that the precious metal is no longer a reliable investment.
There's no doubt that the world is going through tough times as of now. With a war raging in Eastern Europe, inflation rates skyrocketing to multi-decade highs, and potential electricity shortages in some well-developed countries, it's important to stay informed and be prepared for anything.
It is clear that the asset which is supposed to protect us in times of uncertainty, gold, has performed well up until this year. Reaching a local peak of almost $2,100 per ounce in March, gold has certainly been a safe haven for many investors. However, with the current economic climate, it is unclear how long this trend will continue.
What does this mean for the future of gold? Only time will tell, but it is clear that the once-bullish attitude towards the precious metal has cooled off considerably. With interest rates on the rise and no end in sight for the current economic expansion, it seems unlikely that gold will make a comeback anytime soon.
It is no secret that gold has been on a bit of a rollercoaster ride over the past year. After hitting an all-time high in March, the precious metal has seen a significant decline, losing over 22% of its value. This has led some analysts to question gold's status as an effective inflation hedge. Looking forward, it will be interesting to see how gold prices fluctuate in the coming months. With the global economy still facing significant challenges, it is possible that gold could rebound as investors seek out safe haven assets. However, if inflationary pressures continue to ease, gold could struggle to regain its previous highs.
The average lifespan is only 60-85 years, so it would take over a century for gold to serve as an effective inflation hedge, according to Forbes.
Bitcoin's performance isn't as bad as you might think.
Bitcoin is often compared to gold because of some similarities between the two assets, such as the limited supply. But proponents of BTC claim that it is a better option because it is digital, has a pre-programmed supply of 21M coins ever to exist, and doesn’t need a central authority to run.
It's no surprise that Bitcoin's price movements are more correlated with other riskier assets, given the volatile nature of the cryptocurrency. However, it is noteworthy that Bitcoin reached an all-time high of $69,000 last November, at a time when US stocks were also flying high. This shows that Bitcoin is becoming more mainstream and is being taken more seriously by investors.
The world's central banks halting their free-money monetary policies caused a great deal of economic turmoil in 2022. This was something that many experts had predicted would happen, and it caused a lot of financial instability around the world.
Bitcoin's value expansion has been stopped. The asset started losing value quickly and is currently trading at around $20,000. This means that it is down by 71% since last November and 51% year-to-date.
Gold is supposed to be more stable than Bitcoin, but Bitcoin has been on a longer negative streak this year.
Looking at the chart, it is clear that Bitcoin has been on an upward trend while gold has been on a downward trend. Two years ago, Bitcoin was trading at $14,000 while gold was at $1,875. Today, Bitcoin is worth $8,000 and gold is worth $1,700. This shows that Bitcoin is a more stable investment than gold.
Looking at the current price of gold against the dollar, it is evident that the greenback has lost a lot of its purchasing power since February 2013. However, Bitcoin (BTC) was only trading at $15 at that time. This shows that BTC has appreciated considerably in value while the dollar has depreciated.
Looking at the data, it seems that even traditionally stable assets like gold could see poor short-term performance. However, it's important to look at the big picture and decide if you're willing to wait for the long-term investment.
The post "Longest Negative Streak for Gold After 7 Monthly Red Candles" is a clear indication that the precious metal is in trouble. After 7 consecutive monthly losses, gold is now in its longest negative streak in recent history. This is a worrying development for investors and could signal further trouble ahead.
