Cryptocurrencies Are No Substitute for Gold

Want to know the meaning of cryptocurrency? Here it is. It is a digital format of currency which uses encryption techniques to regulate the production of currency units. It is also used to verify the funds transfer which is operated by the central bank independently. Some of you may think that buy gold can be a great substitute for digital currencies but the statement is refused by many organizations like the World Gold Council. The financial system may have an established part which is the cryptocurrencies but they do not have the validity like gold as an asset. Gold has become a part of the mainstream financial system which is believed to boom on a continuous basis in this digital world.

Gold as an asset:

Last year in 2017, Cryptocurrencies like bitcoin have enjoyed a high rise in the prices along with the increase in the price rise of the precious yellow metal. It created some amount of interest for many investors to invest in digital money. But some organizations said that buy gold can never be replaced with any digital money like bitcoin. In fact, it is necessary for the investors to invest in gold as they can keep them as asset for using in the later years. Though, cryptocurrencies can interest you more than gold but that investment is for a short period and not for long term.

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Gold over Cryptocurrencies:

Though it is thought that cryptocurrencies like bitcoin can beat the value of gold in the digital market but it is not true. Here are some of the reasons why gold cannot be overpowered by crytocurrencies.

  • Gold is less volatile

  • It has more liquid market than cryptocurrencies

  • It can be traded in a well established regulatory market

  • It can used as investment purpose

  • The value of gold is easily understood by the investors

  • Gold and cryptocurrencies never overlap with each other in matters or demand and supply. In fact supply of gold is more compared to bitcoin.

  • Buy gold for keeping it as a asset for longer use

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The Supply of Gold and Cryptocurrencies:

If you look at a high level, you can find out many similar things between the supply of cryptocurrencies and gold. The production rate, growth and the supply of gold can is believed to increase in the coming years. While all the factors that are considered for bitcoin trading will decline in future. The rate of supply for cryptocurrencies has almost increased almost by 4% per year. On the contrary if we look at the mining structure of gold, the precious metal is diminishing quickly and will become scarce in the later years. As a result the price will increase at a higher rate. So you can buy gold now to save it for future use. But on the other hand, if you look at the future of cryptocurrencies, they will have high demand because investors will try to use the digital platform more rather than liquid cash. These are some of the attractive attributes for the future investors.

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