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For many years, crypto traders have referred to Bitcoin (BTC) as "digital gold," but actually a better investment than gold? Let’s take a look at some of the common arguments that investors cite when praising gold as an investment and why Bitcoin might be the best long-term option.

Value retention

One of the most common reasons for buying both gold and Bitcoin is that they have a history of holding their value in times of economic uncertainty.

This fact is well documented, and it is undeniable that gold offers the best possible historical protection, but it does not always retain value. The chart below shows that gold traders have also experienced long periods of inflation.

For example, a person who bought gold in September 2011 would have to wait until July 2020 to return to the jungle, and if he continued to catch, he would again be near or under water.

In the history of Bitcoin, it has never taken more than three to four years for its price to once again exceed its height, suggesting that in the long-term trend, BTC could be the best stock market.

Can Bitcoin be a better inflation fence?

Gold has historically been considered a good hedge against inflation because its price tends to rise and the cost of living rises.

However, a closer look at the gold chart compared to Bitcoin shows that although gold has seen a small gain of 21.84% over the past two years, the price of Bitcoin has increased by 311%.

In a world where all living expenses are rising faster than most people can afford, holding on to assets that can outpace inflation actually helps to increase wealth rather than sustain it.

While the volatility and decline in prices in 2022 have been painful, Bitcoin has still offered much more to investors on the horizon for many years.

Bitcoin can add gold in a time of geopolitical uncertainty

Commonly referred to as “disaster assets,” gold is best known for its value in times of political uncertainty as people are known for investing in gold when world tensions rise.

Gold is called a disaster metal so I think if we go back into the recession, gold will go up as a commodity.

Unfortunately for people living in conflict zones or other areas of instability, transporting valuables is a dangerous proposition, with people facing expropriation and theft.

Bitcoin offers a more secure option for people in this situation because they can memorize the seed phrase and travel without fear of losing their money. Once they reach their destination, they can rebuild their wallet and gain access to their assets.

The digital environment of Bitcoin and the presence of multiple international markets and peer-to-peer trading such as LocalBitcoins offers a great opportunity to acquire Bitcoin.

The dollar continues to lose value

The US dollar has been strong in recent months, but not always. During the times when the value of the dollar falls on other currencies, investors have become known for the flow of gold and Bitcoin.

If the various countries continue to move from being the U.S. dollar. centric in favor of the multipolar method, there may be a significant amount of flight without a dollar but those funds will not go into the weak currency.

Although gold has been a commodity for thousands of years, it is not widely used or accepted in our modern digital society and many people in younger generations have never even seen a gold coin in person.

For these groups, Bitcoin represents the most common option that can cover digital lives, and does not require additional security or physical storage.

Bitcoin is also intimidating and deflationary

Many investors and financial experts point to shortages and gains in gold supply following years of declining production as a reason for gold for good investment.

It could take five to ten years for the new mine to reach production, which means that it is likely that the rapid supply of goods will be small and the big banks will dramatically reduce their gold sales by 2008.

That being said, it is estimated that there are still more than 50,000 metric tons of gold in the ground, which miners can concentrate on extracting in the event of a significant price increase.

Bitcoin, on the other hand, has a fixed supply of 21 million BTC that will ever be produced, and its issuance occurs at a known rate. The publicity of the Bitcoin blockchain allows for the location of all Bitcoin to be known and verified.

There is no way to find and verify all the gold shops on this planet, which means that its actual supply will not really be known. As a result, Bitcoin wins the scandal, the downside, and is the most difficult currency created by humanity to date.

Looking for more information on trading and investing in crypto markets?

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Source: cointelegraphy

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