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Bitcoin Vs Gold: Which is a better hedge against inflation?

Bitcoin Vs Gold: Which is a better hedge against inflation?


In a market economy, prices for goods and services can always change. Some prices rise; some prices fall. Inflation occurs if there is a broad increase in the prices of goods and services, not just of individual items; it means you can buy less for $1 today than you could yesterday. In other words, inflation reduces the value of the currency over time. Gold has been present for hundreds of years; even at one time, we used it as a currency because of its stability and of its value. Gold has been present for thousands of years as a safe and reliable asset. A key reason why people respect to gold is that it is a reliable source of protection that has stood the test of time, whereas Bitcoin has not been around during a big financial crisis such as the Great Depression.

Central banks, significant government organizations, pension funds, and astute wealth management offices have always had a portion of their assets invested in gold.

Even though the prices of gold have fluctuated in short term due to certain factors but its value as a precious metal has remained the same. Gold prices can rise as a result of inflation, making it a good inflation hedging investment. When prices rise, the worth of fiat currencies declines, but the value of gold normally increases too. However, Bitcoin is slowly growing as an asset with incredible potential for both short- and long-term investing.


But here the concern is that, is Bitcoin becoming digital gold?

Here comes the intangible metal which has become precious over the period of time. Bitcoin is the most valuable cryptocurrency in the world, measured by market capitalization.
Unlike the stock market, which is only open for trade through the week from 9:30 a.m. to 4:00 p.m. EST. On the other hand, cryptocurrency exchanges are open 24 hours a day, seven days a week, allowing traders to exchange Bitcoin around the clock.

One important point to consider while comparing gold and Bitcoin is that Bitcoin has a finite supply, which means that there will only ever be a total of 21 million Bitcoins in circulation at any given time. That means, if your bet on Bitcoin turns out to be positive, it will only increase in value with time.

Bitcoin is similar to gold in that it is not issued by a central banking system or a federal government. Bitcoin is a decentralized cryptocurrency that is produced by the collective computational power of “miners,” individuals, and groups of people who work to verify transactions that take place on the Bitcoin network.



In Conclusion:


At last, everyone cares about the near future investments! So here the question is, What would be the better investment in 2021? Is it gold or it is Bitcoin?

Let’s find out!



Well, Bitcoin gained a massive market cap of $1 trillion in early 2021. However, the market crashed and most of the gains got washed out around May. If we go with this data, then 2021 looks like it is the year of Bitcoin. Despite a market crash in May 2021, it rallied to stabilize at a respectable rate this year.

With these pointers in mind, you can make a smart decision and invest in Bitcoin if you’ve not started already. It holds a face when compared to gold, and with emerging trends, bitcoin and other cryptos are just going to continue growing with time, even if the volatility factor is high.

Also, various trading platforms like Binance, Wazir X, Coinswitch Kuber make it easy for traders to purchase and sell bitcoins which makes it a more liquid asset. In a note to investors, JP Morgan, the leading American investment banking company, said that Bitcoin is appearing to be a better hedge against inflation than gold. Bitcoin supporters have long tried to assert that cryptocurrency promises better and quicker returns than gold and many people prefer it as a store of value. Both these features are usually associated with gold. Critics, however, say Bitcoin is extremely volatile and there’s no guarantee that it will always exhibit a growth trajectory.

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