David Christopher Harris
BITCOIN vs GOLD A quick comparison โ€“ and why Iโ€™m investing in Bitcoin. ๐’๐œ๐š๐ซ๐œ๐ข๐ญ๐ฒ & ๐ฌ๐ฎ๐ฉ๐ฉ๐ฅ๐ฒ ๐Ÿ”‘Bitcoin: A strict supply cap of 21 million coins ever to be issued. The last Bitcoin is predicted to be mined around 2140. ๐Ÿ‘‘Gold: Limited but not fixed. New mines increase supply output gradually. But it is still a rare resource. ๐•๐จ๐ฅ๐š๐ญ๐ข๐ฅ๐ข๐ญ๐ฒ & ๐ก๐ข๐ฌ๐ญ๐จ๐ซ๐ข๐œ ๐ซ๐ž๐ญ๐ฎ๐ซ๐ง๐ฌ ๐Ÿ”‘Bitcoin: Historically much higher volatility but has shown signs of maturing. Returns (%) are diminishing but also are the drawdowns. ๐Ÿ‘‘Gold: Much lower volatility and is considered a risk-off asset. ๐‹๐ข๐ช๐ฎ๐ข๐๐ข๐ญ๐ฒ & ๐š๐œ๐œ๐ž๐ฌ๐ฌ ๐Ÿ”‘Bitcoin: Rapidly improving institutional access (spot ETFs, wrappers, futures etc). Trading is also accessible and 24/7โ€ฆ but in terms of liquidity, itโ€™s not at the same level as Gold on an institutional level. Gold is far deeper at the sovereign scale, but Bitcoin already rivals many large asset classes in daily liquidity. ๐Ÿ‘‘Gold: Deep, liquid markets (OTC bullion, futures, large central bank holdings) and a long history as a reserve asset. Itโ€™s easy to buy gold as an online and physical investment. ๐”๐ฌ๐ž ๐œ๐š๐ฌ๐ž ๐š๐ง๐ ๐๐ž๐ฆ๐š๐ง๐ ๐Ÿ”‘Bitcoin: Primarily a financial/monetary asset so far. Things that drive demand are store of value holders, speculation, payments, censorship resistance, and network/technology adoption. Policy and regulation are helping too. ๐Ÿ‘‘Gold: Jewellery, tech industry (gold is used in some electronics), trading, store of value holders and central-bank reserves drive demand. ๐’๐ž๐œ๐ฎ๐ซ๐ข๐ญ๐ฒ ๐จ๐Ÿ ๐ญ๐ก๐ž ๐จ๐ซ๐ข๐ ๐ข๐ง๐š๐ฅ ๐š๐ฌ๐ฌ๐ž๐ญ (๐ข๐ ๐ง๐จ๐ซ๐ข๐ง๐  ๐„๐“๐…๐ฌ ๐ž๐ญ๐œ) ๐Ÿ”‘Bitcoin: The network is cryptographic, so itโ€™s inherently designed to be extremely difficult and costly to manipulate/hack. Not that it's impossible, just very difficult. The easiest way to steal someoneโ€™s bitcoin is to steal their private key through scams or social engineering. ๐Ÿ‘‘Gold: Physical storage is well-established but come with extra costs and risk. Holding some at home provides thieves with a wonderful payday. ๐Œ๐š๐ซ๐ค๐ž๐ญ ๐œ๐š๐ฉ ๐Ÿ”‘Bitcoin: Sitting at around 2 trillion dollars. ๐Ÿ‘‘Gold: Sitting at around 22 trillion dollars. ๐“๐‡๐„ ๐‚๐Ž๐Œ๐๐€๐‘๐ˆ๐’๐Ž๐ Bitcoin and Gold are forever compared because their use overlaps: as a store of value. That is why some call Bitcoin โ€˜digital goldโ€™. Gold is a well-established asset, whereas Bitcoin is an emerging technology with potential for future growth. If Bitcoin were to catch up with Goldโ€™s market cap today, Bitcoin would be theoretically priced around 1 million dollars. ๐–๐‡๐˜ ๐ˆ๐Œ ๐ˆ๐๐•๐„๐’๐“๐ˆ๐๐† ๐ˆ๐ ๐๐ˆ๐“๐‚๐Ž๐ˆ๐ There are great reasons to invest in Gold, so this is by no means a Gold-bashing post. However, as a wealth-generating investor (as opposed to a wealth-maintaining one), I look for faster horses that can provide higher returns. Bitcoin has a lower market cap, has increasing adoption, is a functioning & secure project, has a capped supply (which pushes the price up further against our ever-diluting fiat) and continues to gather interest from intentions, governments and companies across the globe. ๐“๐จ๐จ ๐ฅ๐จ๐ง๐  ๐๐ข๐๐ง'๐ญ ๐ซ๐ž๐š๐ Bitcoin = higher upside/risk; Gold = lower upside/risk $BTC $GOLD These are my thoughts, but what do you think? Is the potential upside of Bitcoin too risky? Are there factors that I've missed out?
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