Cryptocurrency has had a massive increase in popularity in recent years, with it not having to rely on any central authority, such as a government or bank, to uphold its value. Whereas gold has been a timeless store of wealth and investment for thousands of years.

This has presented modern day investors with a choice of investing in two distinct asset classes: gold and other tangible assets, or the new and ever evolving investment of crypto currencies.

Both offer unique profit opportunities and risk factors, leading both seasoned investors and new enthusiasts to wonder: which is better for me?

In this article, we will explore their various benefits and risks associated with gold and cryptocurrenices to help you make an informed decision.

Gold’s Stability VS Crypto’s Volatility:

One of the biggest differences to consider between precious metals and cryptocurrencies is their price fluctuation.

Gold has been used for thousands of years, both as a currency by itself and to uphold the value of paper currencies. It’s history of stability is well documented, and whilst fluctuations have been recorded, it’s intrinsic value has always been seen to increase. Its stability is partly due to it’s historical use as a hedge against inflation and as an investment. Even now, large reserves of gold are help by central banks and government bodies, causing its demand to remain consistent in times of economic uncertainty.

Cryptocurrency however, as seen with Bitcoin, has a well-known reputation for unpredictable price swings. Its price can fluctuate by thousands of pounds in a single day, driven by media influences and news, new technological developments or investor sentiments.

These Drastic fluctuations can offer opportunities for high returns but comes with the risk of unprecedented and major losses. The High Risk – High Reward nature of cryptocurrency has offered tech savvy investors the chance to get rich quick but has also presents the risk of irreparable damage to personal finances.

If you are someone who prefers a stable, long-term investment that has a history of stability, gold would be your choice, whereas for those who prefer the potential for quick and large scale gains, the volatile crypto market may be more appealing.

Liquidity and Market Maturity:

An asset is considered liquid when it can easily be turned into cash; something that gold does very well. It is considered one of the most liquid assets in the world and is easily trade in countries all over the globe. It is accessed in many ways, such as EFT’s and gold mine stocks. It’s value is widely recognised with a well established market  and in times of emergency can easily be converted to many forms of cash currency.

Cryptocurrencies are still a young and evolving market, despite its recent surge in popularity. Many places lack the means to convert currencies such as Bitcoin and Ethereum into cash, so whilst it can be converted, it hasn’t yet reached the global levels that gold has.

Cryptocurrencies are now a widely accepted form of online payments, so if you are someone who has access to purchasing online and enjoys the flexibility of it, this could be a way to offer quicker liquidity. However, if you are looking for a more tangible asset that’s easily converted and globally recognised, gold would be your choice.

Physical Gold or Digital Currencies:

Gold is a tangible asset; it’s something that can be physically held and stored. For many investors, this makes it an obvious choice, as being able to see where your investment is and know its location at all times is paramount. Gold holds a value that cannot be erased or hacked, unlike cryptocurrencies, and if it stored properly and securely, it could last indefinitely. This can make it a target for theft and robberies, so it is important that you securely store your gold, such as in a safe, and make sure to keep any locations private.

Cryptocurrencies on the other hand, don’t have this benefit. Their security is based on your own downloaded and viral software, password strength, and how likely you are to be at risk of cyber-attacks. These factors won’t stop hackers from trying though, with the value of cryptocurrencies, cybercrime is becoming more and more prevalent.

If you are looking for an investment that is physical and can be stored in a location of your choosing, then gold should be your choice.

In conclusion, both have a place in a well-diversified investment portfolio. Gold as an investment has withstood the test of time; its value is ever growing; it is a tangible object and is one of the most liquid assets in the world. Cryptocurrencies, whilst new, have shown their potential for massive returns, with ever evolving technology, they represent a form of wealth that could mean the future. In the end, it comes down to what financial goals that you may have, whether that be short or long-term, and the types of risks that you are willing to take.

We are authorised distributors of Metalor and Umicore products and have their full ranges of fine gold and fine silver bullion available, as well as our in-house brand of SMP Bullion, manufactured with LBMA-certified grain in our bar manufacturing facility.

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