Cryptocurrency, which has reached its peak of popularity overnight, is now playing an important role not only as a virtual asset but also as a major tool to avoid inflation. Gold is another well-known weapon to curb inflation. Like crypto, the market price of gold is not controlled by the government. In addition, gold and crypto are both limited assets (the second has not yet been announced), so both depend on price increases, market demand and supply.
In the midst of various plans to impose government control on cryptocurrencies, the lucrative returns of cryptocurrencies have further enticed modern investors into virtual investing. But did digital currency outperform gold? Speculation is spreading in the prominent quarters.
Is cryptocurrency bitcoin a better asset than gold
Talking about what makes Bitcoin more valuable than gold as an asset, Vishu Gupta, founder and CEO of Nonceblox blockchain, said that gold has long been used as a significant traditional weapon against inflation. However, on the one hand, there is a risk of theft, on the other hand, it requires special care for maintenance and storage. It has long been known as one of the most trusted means for investors. However, now the situation has changed. Investors are beginning to think of Bitcoin as the gold of the future because of its large profit margins, maintenance-free hassle and fully decentralized features. He added that the annual return of cryptocurrency is 406%, if it is compared with 5-6% inflation, it will be seen that it not only prevents inflation but also creates wealth for future generations.
Speaking on the same topic, Amit Gupta, Managing Director, SAG Infotech, said that many investors are now interested in investing in other cryptocurrencies, from gold to Bitcoin. According to him, the main reason is to provide strict protection against inflation.
Manoj Dalmia, head of the Proaasetz Exchange, compares gold and cryptocurrencies to some of the following arguments in favor of cryptocurrencies, which undoubtedly establish the superiority of digital currency over gold as an investment medium.
- 1) Low availability: Bitcoin availability is even lower than gold. No government can control or duplicate it. There are only 21 million bitcoins in the market. No one can make more than that. Gold availability, on the other hand, depends on gold mine discovery, so it changes over time.
- 2) Durability: However, bitcoin and gold are almost equally stable. As long as the internet world exists, Bitcoin will continue to exist. In addition, as long as gold is found, the use of gold will continue.
- 3) Divisibility: Bitcoin can be split into smaller units, however, in the case of gold it is unlikely.
- 4) Protection against counterfeiting: Bitcoin can be easily identified and it is almost impossible to counterfeit. Gold can also be identified in a rough way. Although it is not impossible to fake it, there is a strong possibility that it will be caught in the purity test.
However, Vinit Khandare, founder and co-founder of MyFundBazzar, recalls the risks of investing in Bitcoin despite its many advantages. Most importantly, there is no past evidence of a long-term relationship between it and inflation.
Therefore, investing in unsecured crypto or investing in traditional gold, which has a long-standing reputation, will be a test for investors in the future.
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