Introduction
Inflation has always been one of the major problems for fiat currencies. No matter which fiat currency we take, there is always a possibility that its price might inflate in the future. This is the reason why people invest in Gold as a store value.
However, according to the world financial leader, Bitcoin has taken Gold as a hedge against inflation. Bitcoin has long been considered a digital gold that can act as a store value to fight inflation.
There are several reasons why experts believe this way. For instance, the value of Bitcoin has seen a boost of almost 200% this year. At the same time, Gold has seen only a 22% boost in the price evaluation. Though both the assets have been benefited by the fiscal policies launched by the central banks amid COVID 19, there is a significant gap in their performance.
Why Are Investors Choosing Bitcoin Over Gold to Fight Inflation?
During the international economic crisis, countries kept on printing money. This practice has led to inflation possibilities. To fight back against this situation, investors and traders have always relied on the Gold as a financial store value.
In the last decade, Gold has been joined by another long-term store value solution: Bitcoin. Some even consider that Bitcoin is a better option than Gold. And why wouldn’t they? After all, Bitcoin has seen a 200% price hike which is much higher than the Gold price rise of 22%.
In the last couple of months, dollars have seen a significant 5% drop in the market evaluation. Experts believe that this negative curve can increase in the future, resulting in a 20% drop in dollars price evaluation.
After seeing the dollars’ performance and knowing the fact that this might affect the price of the Gold, investors are shifting their assets to the Cryptocurrencies.
Here are why investors think that Cryptocurrency might be the best choice over Gold to fight back inflation.
Purchasing power
When Satoshi Nakamoto created the concept of the Cryptocurrency, the sole purpose was to create a transaction network for the people that will support them in any financial crisis. We all know that 2007 has seen one of the worst financial crises. This showed the true strength of the central financial system.
To give value to Bitcoin, Satoshi Nakamoto fixed the number of Bitcoin to 21 Million. This ensures that the Bitcoin will never be devalued by money printing. Bitcoin is still in its early stage, so its purchasing power is nowhere near its full potential. However, when all the 21 million Bitcoin will be in the market, that will be the time when the value of Bitcoin will be in its prime.
Investors have foreseen the possible outcome, and they believe that it is a matter of regulation. If there is a network for smooth regulation, Bitcoin has the power even to replace fiat currencies.
Liquidity
In times of crisis, Liquidity influences most of the decisions. We are going through a phase where many people are losing their jobs, and companies are being forced to shut down due to the lack of financial flow. People are looking for ways to convert their assets into money as quickly as possible. However, fiat currencies have also taken massive damage. Then the only option left for us to turn towards digital currencies.
When we are talking about digital currencies, the first currency that we can think of is Bitcoin. And fortunately, Bitcoin can be traded 24×7. That means Bitcoins are the only store value throughout the year.
Portability
The currency pandemic has forced the people to be cashless with the transaction. But this practice increased the overhead expenses. Here overhead expenses mean the transaction cost you have to pay to intermediaries while making a transaction. This cost might seem very low at first, but if you can sum up all the transaction costs over the past years, you will find that you have paid a significant percentage of your ROI in money transactions. This can be saved by practicing Bitcoin transactions.
Conclusion
We are not comparing Gold and Bitcoin. We are just stating the facts based on the events happening today. And the facts show us that their Bitcoin is leading by a significant margin. These are our thoughts. If you think the same, you can read more to start trading in Cryptocurrency.
