In the traditional economy, the best way to invest during a recession is to buy gold. This was a very effective strategy in the past but with the launch of Bitcoin in 2009, investors now have two options to weigh. They have to choose between investing in gold and investing in bitcoin.
Investing in Gold
One of the factors that make gold a strong investment option is that it is valuable and scarce. The supply of gold has also remained low and this creates price stability. Besides, gold is not affiliated with other financial assets and services in any way. It is therefore a great solution for those who want to avoid the risks associated with stock markets and indices.
The prices of gold are also very stable and they rarely rise. This makes it a bad option for investors who want to earn returns, but a safe option for investors who just want to hold their money in a safe investment. However, an increased supply of gold can reduce its value.
Investing in Bitcoin
Bitcoin, a cryptocurrency based on the blockchain network, has slight similarities with gold. Bitcoin does not have a strong relationship with other financial assets such as stocks and this has created the term ‘digital gold’.
The price of one bitcoin has also surpassed the price of an ounce of gold, making it a more valuable investment. Bitcoin is also limited in supply and this is made possible by the mining protocol that was established by Bitcoin founder, Satoshi Nakamoto.
Which one should you pick?
When it comes to legality, gold scores highly because the use of Bitcoin has been highly regulated due to the high amount of risk that comes with transacting with Bitcoin, investing in gold is only favorable for people who want to save their money without expecting high returns.