Bitcoin and gold have been compared for a long time. A new poll initiated by former Congressman of Texas, Ron Paul has revealed that Bitcoin has become people’s favorite investment option for long-term investment.
Only 33% Will Consider Gold for Long Term- Holding
Ron Paul initiated a poll on Twitter asking people what they would invest in if a wealthy person gifted them $10,000. The options for the same were – 10-year US Treasury Bond, Federal Reserve Notes, Gold and Bitcoin.
Federal Reserve registered the lowest number of votes with 2%, it was followed by 10-year US Treasury Bond with 7% votes. Interestingly, Gold managed to get 33% votes but Bitcoin emerged as the winner with 58% votes. Till now, 64,000 people have voted and still, 5 hours are left for the poll to end.
Furthermore, the poll asks about 10-year investments this implies that people prefer Bitcoin as s long-term holding option.
Bitcoin and Gold both are scarce assets with a limited supply. However, unlike Bitcoin gold cannot be transferred online. Moreover, its weight is often an issue for bulk transportation. Not to mention the protection measures needed for the same.
The total supply could be viewed from a different perspective, as well. Bitcoin is preprogrammed to cut in half the rewards given to miners every four years in a process called Halving. Two halvings have occurred so far, both pushing Bitcoin’s price to go up, and the next one will happen in 2020.
When it comes to investing in Gold, not only is security a prime issue, it can be an asset misfit to store significant wealth in. If we consider the previous scenarios, Gold has failed time and again to show remarkable gains when the global economy was booming. Also, it had disappointed its advocates several times when they predicted that the price of gold will shoot up. Unfortunately for Gold, Bitcoin and other cryptocurrencies give it a tough competition and are actively fighting with it for the “safe haven” status.
Every year say 3,300 tons of gold is produced, the figures translate to $200 billion worth assets purchased every year by buyers. With a population of 7 billion, it makes up for $20 per head to make up for the supply, which invariably doesn’t lead to a downtrend in the price of gold.
In the case of Bitcoin, say $10,000 a coin, there is a $6.5 billion dollars of new supply that needs to be conjured by a new demand to maintain prices. Interestingly, this is a tiny fraction when compared to the case of Gold. With that being said, both amounts are not that vast that cannot be supported by the global economy. It is a clear indication that Bitcoin will go further up and much faster than Gold if there is a sudden spike in demand for safe-haven assets.
Also, with halving every four years, if Bitcoin price reacts like the price of gold, after 12 years gold, output would slump nearly 90%.
Will Bitcoin continue to intrigue people and maintain its value as the “Safe Haven” asset? Let us know, what you think, in the comments below!
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Coming from a physics background the unpredictability and intrigue of the cryptoverse attracted me to take a dive in this field. I am all eyes and ears for the latest trends in blockchain and crypto sphere. Whenever I am not writing or researching, I love to read sci-fi novels, play basketball and watch action movies. I strongly believe that blockchain and cryptocurrency will bring lasting transformations in people’s lives in the years to come. You can reach out to me at supriya [at] coingape.com.