Bitcoin and gold are clearly becoming competitors in the fight for investor attention. Gold reigns when it comes to store of value. Bitcoin remains the riskier but more rewarding digital upstart. Here is what industry insiders have to say about the two asset classes.
Gold remains the industry standard for store of value. However, the more versatile digital asset is gaining ground on gold. Bitcoin has seen its popularity soar over the past ten years.
Investors are now considering holding Bitcoin for the next ten years. This is an extremely fast maturation: just ten years ago Bitcoin would not have even been mentioned as a comparison to gold.
Industry experts for both gave Business Insider their feedback on why they would hold gold or Bitcoin for the next ten years.
Gold Versus Bitcoin
Gold has been around for more years than we would prefer to count. Its competitor has only been on the scene for just over ten years. During that decade or so, Bitcoin has climbed from just mere cents to now ranging at over $56,000 per Bitcoin.
The digital asset is now more expensive than an ounce of gold, which currently costs $1791. Essentially, one Bitcoin could buy you nearly one kilogram of the metal. Bitcoin has recently broken the $1 trillion market cap and could quite easily be eyeing an attack on gold in the future.
Diversification is a main reason for investors and industry players to consider putting their money in the digital currency. Gold maximalists, though, believe Bitcoin is either just a fad, or a volatile digital speculative asset that does not hold value well.
Go for Gold
Former Chief Economist and strategist for Merrill Lynch David Rosenberg believes gold is a better bet. The strategist explains that gold has thousands of years of historical data to show it is a proven store of value. Rosenberg also mentions that Bitcoin volatility is five times that of gold. He further states, “ The day that Queen Elizabeth trades in the five pounds of gold in her crown for crypto is the day I’ll shift course.”
The proven track records of gold and silver make them desirable assets to hold long term. Phil Baker, President and CEO of Hecla Mining Company, believes that cryptocurrencies are fundamentally different from precious metals, and that all cryptocurrencies will do is improve the metals’ value.
Sylvia Carrasco believes that Bitcoin’s ability to retain its value long term is highly questionable. The Goldex founder also reiterates that the precious metal is the safe-haven asset of choice. Explaining that all the hype for the new kid on the block does not mean it will eat into gold’s market share.
Investment strategy officer at Glenmede Michael Reynolds believes Bitcoin is more relatable to equity assets than gold. Reynolds explains that the demand for Bitcoin “may be over its skis relative to its likelihood to carve out a significant economic or financial use…