Invest
Should you invest in gold or bitcoin?
With massive stimulus packages around the world leading to rising inflation expectations, investors are increasingly turning to stores of wealth, with Australians preferring digital assets to gold, new research has revealed.
Should you invest in gold or bitcoin?
With massive stimulus packages around the world leading to rising inflation expectations, investors are increasingly turning to stores of wealth, with Australians preferring digital assets to gold, new research has revealed.
During a recent seminar, crypto specialists Apollo capital and gold traders Meld Gold discussed how investors can not only store their wealth, but get ahead through buying either gold or digital currencies.
Why you should invest in gold over bitcoin
Meld Gold’s founder Michael Cotton believes that gold is the only true store of wealth against inflation, with crypto assets such as bitcoin (BTC) simply trying to recreate the properties that make gold unique.
“If we want to be harsh, BTC plagiarised gold’s natural DNA and recreated it on chain. In reality, it’s a really hard thing to actually copy the physical attributes of gold. Gold is understood and globally accepted across the world. Gold is the only asset in the world accepted at local currency prices,” he told investors.
Mr Cotton points out that due to gold being universally accepted and having a relatively stable price compared with crypto currencies, it acts as a store of wealth for investors against inflation.
“In terms of a currency, the volatility of BTC makes it very hard for the average person to use it as a currency in their lives.
“If you have your pay cheque in BTC, for example, and by the end of the week it’s halved in value and you can’t cover your bills, that is a real issue.”
“So, while that volatility makes for an amazing opportunity for investing, but it does mean it’s hard to use as currency. Even for a concept of storing BTC, having to constantly adjust the price of it is a real investment issue,” Mr Cotton explained.
He also highlighted that gold over the last 15 years has seen an average 10 per cent increase in price, meaning it has outperformed the sharemarket, bonds and property while acting as a store of wealth.
Why you should invest in bitcoin over gold
Apollo Capital’s chief investment officer, Henrik Andersson, told investors that if they had started a portfolio with equal weights in BTC and gold, that BTC would become the larger share quickly due to its superior performance.
He also noted that bitcoin has a more finite supply compared with gold, especially as humans look to expand mining operations across the universe.
“When it comes to gold, maybe not an unlimited supply but pretty close to it when a single astroid can have 700 quintillion worth of gold, so that is 700 billion billion dollars worth of gold.
“If that gold was brought back to earth, everyone would get $92 billion. So, only things that are scarce and have utility have value, and gold is not limited in supply.”
While highlighting space mining is unlikely to start up tomorrow, he said it could be an issue for investors over the coming decades.
Mr Andersson also opined that BTC is the more secure asset class, even though BTC’s heightened security has meant up to 2 million coins have been lost forever.
“With computer science, we have unprecedented deep security,” he said.
“With most technology, it’s easier to attack than defend, but cryptography is very different. It’s much easier to secure than attack,” he said.
Which way are investors leaning?
Australian cryptocurrency and digital assets exchange BTC Markets has revealed that more Australians now invest in cryptocurrencies like bitcoin than precious metals like gold and silver.
Commenting on the findings, BTC Markets CEO Caroline Bowler said she is not surprised that more Australians now invest in cryptocurrency than fixed income, annuities or commodities.
“Digital assets and cryptocurrencies are becoming increasingly popular among Australian investors of all ages.
“In the last 12 months, we have seen a shift from 25-45-year-old males to a much broader age group, particularly early retirees who are interested in diversifying their investment portfolio and are catching up with this fastest-growing asset class.”
The survey found that one in three (33 per cent) crypto investors made their first investment in bitcoin or other cryptocurrencies after the stock market crash led by the COVID-19 pandemic in March 2020.
About the author
About the author
Commodity
Morrison’s gas-led recovery sees manufacturers ‘held to ransom’ by gas cartel
Australia’s manufacturing sector and its workers are being ‘held to ransom’ by the gas cartel, despite the Morrison government promising cheap gas as a key policy in the COVID-19 recovery plan. ...Read more
Commodity
‘Investors should take note’: Gas-led recovery to lead to stranded assets
Australia’s gas-led economic recovery could be relying on inaccurate financial assumptions, new research has revealed. ...Read more
Commodity
Credibility up in flames as government opens 21 new gas and oil exploration sites
Climate groups are saying the Morrison government lacks any credibility when it comes to climate change after it announced 21 new gas and oil exploration areas. ...Read more
Commodity
Morrison urged to drop gas-led recovery after new global warning
The International Energy Agency has found that countries like Australia need to transition their energy grid within 14 years to reach net zero, defying Prime Minister Scott Morrison’s gas-led econom...Read more
Commodity
Taxpayers to bear brunt of Morrison’s $2bn pledge to oil refineries
Taxpayers are set to be on the hook for up to $2 billion over the next decade as the government commits to protecting two oil refineries. ...Read more
Commodity
Government unveils $1bn energy deal
The Morrison government has announced a $1.1 billion energy and emissions agreement between the federal and South Australian state government. ...Read more
Commodity
Australia can get rid of coal without prices skyrocketing
Australia’s transition to renewable energy is unlikely to create unaffordable electricity prices or come at the risk to reliability, with policymakers urged to generate the majority of power from re...Read more
Commodity
Retail clients will no longer dabble in binary options following ASIC ban
ASIC is cracking down on binary options by banning their sale to retail clients as of 3 May, after trading in this financial product cost retail clients an estimated net $490 million in 2018. ...Read more
How the post-lockdown period will influence property, what the soaring NFT market means, and defining financial wellness
Listen now
APRA’s mortgage crackdown, the power of DeFi and last-minute tax tips
Listen now
What to expect as the end of lockdown looms? Will the Stage 2 tax cuts boost your tax return? Where should investors be looking as the economy reopens?
Listen now
Could property prices inflate by another 20%? What’s happening in recent dividend announcements? Did your fund fail the YFYS test?
Listen now
Commodity
Morrison’s gas-led recovery sees manufacturers ‘held to ransom’ by gas cartel
Australia’s manufacturing sector and its workers are being ‘held to ransom’ by the gas cartel, despite the Morrison government promising cheap gas as a key policy in the COVID-19 recovery plan. ...Read more
Commodity
‘Investors should take note’: Gas-led recovery to lead to stranded assets
Australia’s gas-led economic recovery could be relying on inaccurate financial assumptions, new research has revealed. ...Read more
Commodity
Credibility up in flames as government opens 21 new gas and oil exploration sites
Climate groups are saying the Morrison government lacks any credibility when it comes to climate change after it announced 21 new gas and oil exploration areas. ...Read more
Commodity
Morrison urged to drop gas-led recovery after new global warning
The International Energy Agency has found that countries like Australia need to transition their energy grid within 14 years to reach net zero, defying Prime Minister Scott Morrison’s gas-led econom...Read more
Commodity
Taxpayers to bear brunt of Morrison’s $2bn pledge to oil refineries
Taxpayers are set to be on the hook for up to $2 billion over the next decade as the government commits to protecting two oil refineries. ...Read more
Commodity
Government unveils $1bn energy deal
The Morrison government has announced a $1.1 billion energy and emissions agreement between the federal and South Australian state government. ...Read more
Commodity
Australia can get rid of coal without prices skyrocketing
Australia’s transition to renewable energy is unlikely to create unaffordable electricity prices or come at the risk to reliability, with policymakers urged to generate the majority of power from re...Read more
Commodity
Retail clients will no longer dabble in binary options following ASIC ban
ASIC is cracking down on binary options by banning their sale to retail clients as of 3 May, after trading in this financial product cost retail clients an estimated net $490 million in 2018. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
