Gold vs Crypto vs Bitcoin
Updated: Jun 14
Which Is the Better Long-Term Investment?
In the current economic climate, inflation is a significant concern, particularly in countries like Laos and Myanmar, where the value of the national currency can fluctuate rapidly. In such a scenario, it may not be prudent to hold large amounts of fiat currency as a savings or investment option as the value of the fiat currency can erode over time due to inflation.
Therefore, it's crucial to consider alternative investment options that can protect your wealth from inflation and provide potential returns. This is where crypto savings, gold savings, and bitcoin come into play.
In today's world, saving and investing have become an essential part of our financial planning. With so many options available, it can be challenging to decide which investment is better for us. Two popular alternative investment options are crypto savings and gold savings. The former way has the distinct ‘Bitcoin’ known as digital gold (just an A.K.A) and ‘PAXG (Pax Gold)’ as the cryptocurrency with price pegged to the real gold. In this post, we'll compare them and help you decide which is a better investment for you.
Gold historically performs well during market corrections because it maintains its value; its price holds somewhat steady, then tends to rise as investors move from stocks to gold if a recession is threatening. This makes it useful as a hedge—an investment that moves opposite another—against market corrections or recessions.
During the Covid-19 pandemic, not all investors turned to Bitcoin; many followed traditional strategies and transitioned to gold. As a result, gold's price skyrocketed from just below $1,300 in late 2019 to nearly $2,100 in mid-2020. Through 2021, its price dropped as economies slowly recovered, but it still averaged higher than pre-pandemic recession levels, and recently Gold price is reaching its all time high this month at $2,081.
Cryptocurrency, a form of decentralized digital currency, has emerged as a groundbreaking financial innovation since the launch of Bitcoin in 2009. Initially, it appealed to a niche group of enthusiasts, but its significance quickly spread as people realized its potential. The subsequent rise of cryptocurrency mining farms, the establishment of digital exchanges, and the emergence of various altcoins (Including meme coins) transformed the landscape of finance and investing, becoming one of the popular investment vehicles in this decade whether you are a conservative or speculative person.
Bitcoin: the digital gold
Bitcoin, launched in 2009, is the decentralized technology that ushered in a new era in finance and investing. Initially, these digital currencies were only attractive to a few niche enthusiasts. In 2010, early speculators discovered the Bitcoins they had previously purchased for fractions of a cent had grown to $0.09 per Bitcoin. Large-scale Bitcoin mining farms and pools became popular, and cryptocurrency exchanges emerged.
When the Covid-19 pandemic began to shut down economies worldwide in 2020, speculators and investors noticed that Bitcoin's value wasn't falling alongside stock values. They started pouring capital into it. Institutional investors continued looking for ways to create investment instruments and funds from it, and its price soared—by November 2021, Bitcoin's price hit $69,000.
PAXG: The Best of Both Worlds
PAXG, a cryptocurrency backed by physical gold, represents the harmonious fusion of the digital and tangible worlds. It combines the advantages of blockchain technology with the enduring value of gold, creating a unique investment opportunity for individuals seeking stability and security. As a digital representation of physical gold, PAXG allows investors to enjoy the benefits of both traditional gold ownership and the convenience of cryptocurrency transactions. With each token representing one troy ounce of gold stored in secure vaults, PAXG offers a level of trust and stability that is highly sought after in the volatile cryptocurrency market. By bridging the gap between the digital and physical realms, PAXG emerges as a compelling option for those seeking the best of both worlds in their investment strategy.
Bitcoin, PAXG (Paxos Gold), and gold differ significantly in terms of regulation as investment vehicles. Bitcoin, being a decentralized cryptocurrency, operates outside the realm of traditional regulatory frameworks. Its global nature and lack of centralized control make it difficult for governments to enforce regulations on Bitcoin transactions and holdings. This regulatory ambiguity can be both a strength and a weakness for Bitcoin, as it provides freedom and privacy but also exposes investors to potential risks. On the other hand, PAXG, a digital asset representing physical gold, is subject to regulations governing the underlying asset—gold. It provides investors with the benefits of gold ownership while leveraging the speed and efficiency of blockchain technology. As for gold itself, it has a long history as a regulated investment asset. Governments and regulatory bodies have established frameworks to oversee gold trading, storage, and taxation, ensuring transparency and stability in its market. Gold's regulation provides investors with a sense of security and confidence, knowing that it operates within established legal frameworks.
Bitcoin, PAXG (Paxos Gold), and gold have distinct utility aspects as investment vehicles. Bitcoin's utility lies in its potential as a decentralized digital currency and a store of value. It offers fast and borderless transactions, allowing for greater financial inclusivity and the potential for hedging against inflation. However, Bitcoin's volatility and speculative nature can make it less reliable as a medium of exchange or a stable store of value. PAXG, on the other hand, combines the advantages of digital assets and the stability of physical gold. It enables fractional ownership of gold, making it more accessible and divisible than holding physical gold directly. PAXG can serve as a hedge against economic uncertainty and diversify investment portfolios. Gold, with its centuries-long track record, has been regarded as a safe haven asset. It has proven its utility as a store of value, providing stability during times of market turbulence. Additionally, gold has industrial applications and is used in various sectors, further adding to its utility. While gold may lack the convenience and speed of digital assets, its tangible and universally recognized value make it a reliable investment vehicle for long-term wealth preservation.
Bitcoin, PAXG (Paxos Gold), and Gold all serve as investment vehicles with varying degrees of liquidity. Bitcoin, as a digital cryptocurrency, offers high liquidity due to its global reach and active trading markets. Its decentralized nature allows for easy and quick transactions, making it highly liquid and accessible to investors worldwide. On the other hand, PAXG, which is a digital representation of physical gold, provides a level of liquidity that bridges the gap between traditional gold and digital assets. While it may not have the same level of liquidity as Bitcoin, PAXG offers the advantage of being backed by physical gold, ensuring its underlying value and adding a layer of stability. Gold possesses a certain level of liquidity through established markets such as futures and physical trading. Although its liquidity might be lower compared to Bitcoin and PAXG, gold's historical stability and wide acceptance make it a reliable investment option. Ultimately, the choice of investment vehicle will depend on an individual's risk tolerance, investment goals, and preferences for liquidity.
Bitcoin, PAXG (Paxos Gold), and Gold exhibit different levels of volatility as investment vehicles. Bitcoin is known for its extreme price volatility, characterized by significant price fluctuations in short periods. While this volatility can present opportunities for high returns, it also carries substantial risks. PAXG, being a digital representation of physical gold, tends to have lower volatility compared to Bitcoin due to its underlying asset's relative stability. Gold, as a traditional investment, generally experiences lower volatility compared to Bitcoin. However, it is important to note that all three assets can still be subject to market fluctuations and should be approached with caution. Investors seeking higher potential returns may be attracted to Bitcoin's volatility, while those prioritizing stability may find PAXG or physical gold more suitable. Ultimately, the decision to invest in these assets should align with one's risk tolerance and investment objectives.
So which one is better?
When comparing Bitcoin, PAXG (Paxos Gold), and Gold as investment vehicles, it becomes apparent that each option has its own unique set of advantages and disadvantages. Bitcoin offers the potential for high returns and global accessibility but comes with high volatility and regulatory uncertainties. Gold, a traditional investment, provides stability and a long-standing reputation as a store of value, but it lacks the convenience and liquidity of digital assets. PAXG, however, combines the pros of both traditional gold and gold-backed cryptocurrency. It offers the stability and intrinsic value of physical gold while also leveraging the advantages of digital assets, such as ease of transfer and divisibility. PAXG allows investors to benefit from the diversification and security of gold, while also enjoying the convenience and accessibility of a digital investment. Overall, PAXG can be seen as a compelling option that brings together the best of both worlds, catering to investors seeking a balanced approach to their portfolio.
Nevertheless, it's important to have a diverse risk profile. Rather than choosing between crypto, Bitcoin, and Gold, consider diversifying your portfolio with a variety of assets.
Nativ, a ‘digital gold supported’ crypto wallet with yield farming
With Nativ, you can invest in both PAXG and Bitcoin, allowing you to diversify your portfolio even further—or even earn a yield on those cryptocurrencies! By diversifying your investments, you can reduce risk and potentially increase returns.
As previously mentioned, you not only have the flexibility to diversify your portfolio, but you can also earn passive income on the selected assets you save with Nativ. This can provide an additional source of income and further maximize your investment potential. Combined with our in-app design that focuses on accessibility for everyone, your savings journey on crypto would be easier than ever. Try now at Nativpay.com