With the global pandemic raging, the last year or so has seen lots of ups and downs in the world of investing. Cryptocurrencies such as Bitcoin have seen massive gains in their value, only for them to see significant drops as well. Gold has also seen a considerable increase in its value over the last year, with record prices reaching as high as USD1900 per ounce, making it a desirable investment.
However, some people predict gold to increase in value significantly, and the catalyst that may make this happen is the volatility of cryptocurrencies.
Below is some more information on the subject that may make you want to dump your Bitcoin and invest in gold instead.
Why Cryptocurrencies Are So Volatile?
Cryptocurrency is a niche market, with many people not owning any, although many have gold in their possession, even if it is only jewelry. People have predicted that cryptocurrencies will move into the mainstream, with people able to make a variety of purchases using their Bitcoin and other cryptocurrencies. However, this is still yet to come about fully, and although you can make purchases using your Bitcoin, it’s something many retailers do not have in place yet.
Companies like Tesla stated you could purchase one of their vehicles using Bitcoin, which saw a massive surge in their value. Not long after, the CEO of Tesla, Elon Musk, later said that they are putting it on the back burner until Bitcoin mining becomes more eco-friendly, which wiped off 10% of the value of Bitcoin.
Living In Uncertain Times
With the times that we live in being so uncertain, people are looking for safe havens for their investments, and shying away from ones that are volatile. Many people have liquidated much of their cryptocurrency investments and are looking for safer places to keep their wealth safe, which has seen them turn to the likes of gold – often said to be an excellent hedge against inflation.
With more people looking to invest in gold, it pushes up the demand, and as gold is a commodity, it, in turn, increases the price. There is a finite amount of gold and other precious metals on our planet, and once the resource dries up, the price is going to increase significantly. If you are looking to invest in gold, you may wish to speak to reputable Brisbane gold dealers such as City Gold Bullion or the reputable dealers in your location sooner rather than later, before the price goes up again.
Bitcoin also has a finite number of coins available, and initially, there was only ever going to be a maximum of 21 million Bitcoins available. However, unlike with gold, Bitcoin can change and increase the number of coins, which can significantly affect their value.
Ultimately, the best investment portfolios are diverse ones, and it pays to not put all your eggs in one basket, including gold. It may be lucrative to continue investing in cryptocurrencies if you are careful, and you can channel any profits you make into precious metals. Diversifying your investment portfolio can help you prevent seeing your wealth wiped out when a market crashes, and you may even profit with your other investments if this happens.
