Page 1 of 2

The ultimate safe haven trade for investors was gold for many years. With bitcoin topping $11,000 a piece, should you be looking at bitcoin over gold? finews.asia features a commentary from precious metals expert Joshua Rotbart.

Gold usually performs well during corrections in the market because even if it doesn’t necessarily rise, an asset that remains static while others decline is quite useful as a hedge. Plus, as more people flee stocks and invest in gold, the price rises accordingly.

Bitcoin is a blockchain-based cryptocurrency that shares some properties with its gold counterpart. In fact, many have called bitcoin «digital gold» in the past due to its weak relationship with all other assets, stocks especially.

Like gold, there is a limited amount of bitcoin. It must be mined, but not with drilling machinery, instead, the digital currency is mined with the total computer power of its vast network of users, who process transactions on the blockchain for a small amount of bitcoin.

«For many, both gold and bitcoin are a genuine decentralized global currency»

At an estimated cap of 21 million bitcoins, demand has a magnified effect on the cryptocurrency’s price. For many, both gold and bitcoin are a genuine decentralized global currency.

The Price of Gold & Bitcoin

The price of gold and bitcoin are showing solid gains, The question is, which one is more reliable?

Of course, gold has a few thousand years track history to back this thesis because bitcoin is relatively new. However, this is not to say that bitcoin cannot be considered as a safe haven.

As mentioned, bitcoin recently surpassed the $11,000 per piece mark, while gold stands at around $1,285 per ounce. That means many people investing less than $11,000 are buying less than one bitcoin, as opposed to gold dealers who are selling physical amounts of gold as small little as 1 gram wafers – a mere fraction of the cost of 1 whole bitcoin.

For hundreds of years, gold has dominated the safe-haven asset arena, and it is yet unknown if bitcoin presents a real threat.