“Billions or Trillions?
We don’t even require an analyst to make a satisfactory comparison on this at least!”
The $275 billion market value of bitcoin belittles gold’s $8.3 trillion alone. This contrast is perhaps ‘Enough’!
These economical insights and scalable comparisons doesn’t solely qualify to jive the jingle of owning those idolized ‘bullion stockpile’ but a lot of hedging benefits of the physical commodity as well give enough reasons to still hold tight on to those sparkling metals.
Although one can’t deny the flurry of excitement that the crypto currency based bitcoin has brought about, yet this mammoth show-up is just momentary as opposed to the monumental benefits that the gold bullion alone offers in its comparison.
Bitcoin? What’s that?
Bitcoin is predominantly a digital currency which allows peer-to-peer transactions taking place between users directly, without an intermediary. These transactions are validated by network nodes making it highly secured and are being recorded in a public distributed ledger system called the blockchain. Bitcoin rose to a mainstream cryptocurrency and grabbed the world’s attention essentially in 2017. This sudden upsurge created much rumour mongering and left the common masses speculating the worth of their yearlong deposits of bullions in comparison to the recent bitcoin. But, this digital cash has no upstanding to shake off the bullion deposits essentially in coming years. This comes as a much relief setting to the maddened up extravaganza in the commodity sector which at some particular time kept the entire world baffled indeed!
Bitcoin doesn’t take over the Bullion space
“The cryptocurrency isn’t siphoning demand from bullion”, a leading financial giant quotes!
Evidently the statistics tell the tale. This notion is very well imbibed to the financial minds but essentially the jive of bitcoin still persists in the airwave. To address this perhaps is the mission of this utilitarian blog.
“Gold is Money, Everything else is Credit!”
To start with the critical analysis and weighing out of facts and figures, the above quote summarises the extract of the whole thing so beautifully… yes as beautiful as gold! The love would just linger about here too…!
The following points should be carefully noted down by all those probable speculators waiting to dig deep into the financial nuances.
- The precious metals and the related tangible commodity would always have a worth in terms of some financial assets, they wouldn’t be nullified to a zero amount altogether. Yes, the relativities would always be seen in the worth of bullions over short and long terms but never an absolute zero indeed.
- Assets on paper are subject to default and other counterparty risks. This includes legal tender, not just stocks and bonds.
- Cryptocurrencies don’t even have a counterparty or interdisciplinary agent one can go after if they fail. They are purely peer-to-peer prototype driven and owing to the notion of being the virtual currency a lot of impending risks do come up!
- In the worst scenario we can imagine cryptocurrencies dropping down as close as to zero but never would be such a case with the bullion commodity.
The contrast would be crystal clear by now to the general investors who would be quite lately maddened up by the choice making between bullion and the bitcoin for their next investment season!
Why was that sudden airwave of bitcoin?
Although looking at the huge and diversified benefits that the bullion commodity offers, yet one has to wonder as to why that sudden excitement about bitcoin even took in the first place. Here’s the reason: Increased volatility and the lack of liquidity! Yes, indeed these two features of the novel bitcoin did push bullion on a shortened period of backslash but bullion has essentially shut off its critics quite enthusiastically reminding us all who the master was in the first place!
Bitcoin – A simple NO
Yes, you heard that right. These checkpoints would aid you in making up your decision of avoiding the bitcoins even firmer.
- Digital nature: Although some financial critics hail this feature of the cryptocurrency quite rewardingly but on ground zero it beholds a pounding state. Bitcoins do not have any physical form which simply restricts them from being used in the physical world. One cannot store or save them outside the digital platform and hence this virtual asset creates much hustle.
- Illegal activities: Owing to the anonymous nature of the bitcoin, it presents a golden opportunity indeed to the crime agents and illegal money launders to happily utilise this currency for their obnoxious purposes. Moreover, bitcoin could also be very easily be used for weapons stocking and even for illegitimate drug buying/selling. To top this up there is probably no way to stop or to abort such transactions on legal pretexts with absolutely no governing agency or body to serve as a checkpoint.
- Popularity and end usage: Even after grabbing on that exalted media attention, bitcoin is still a very new financial asset limiting its acceptance in a very small pool of probable users in the world. If you expect a commoner to own it, you’ll surely be non- serious. On the contrary look at the market value and spectrum of the bullion and the precious metals. It has been from ages and people have accepted it with all vigour. But the ‘merciful’ bitcoin seems to only adorn the digital wallets of the ultra- rich or the ultra-tech only. Many people are still not aware of what these novel digital currencies are. So, obviously the larger picture is quite clear about their end usage in the physical world.
The Bottom Line!
The correlation matrix between the two assets i.e., the bitcoin and the bullion clearly makes our bullion win the race subjected to other broader aspects like political, socio-economic and security as well. So, without any more speculation grab on to those bullions even on a faster pace now! You’ll surely thank us for guiding you all in the right way.