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Buy Bitcoin With Gold

If you're looking for an asset that you can quickly move in and out of without losing value in a short time (like Bitcoin can), gold might be a better option. It is a much more liquid asset and can allow you to reallocate your portfolio quicker when the market fluctuates.

buy bitcoin with gold

Which is better depends upon your risk tolerance, investing strategy, how much capital you have to use, and how much you can tolerate losing. Bitcoin is much more volatile than gold, making it a riskier investment than gold.

The Bitcoin-(BTC 1.75%)-versus-gold debate is heating up again after Wall Street investment bank Goldman Sachs (GS 0.72%) released a new research note documenting all the reasons it views gold as a better investment than Bitcoin. With Bitcoin down about 64% for the year, it's easy to see why Goldman Sachs has soured on the cryptocurrency.

As Goldman Sachs argues, there is simply too much speculation and volatility surrounding Bitcoin. On top of that, the original cryptocurrency has failed to deliver on several of the key promises that were supposed to underpin its value proposition -- such as the idea that it would act as a hedge against inflation or extreme market volatility. Although some of Bitcoin's weaknesses have certainly been exposed this year, the question is still worth asking: Is gold really a better long-term investment than Bitcoin?

Right now, says Goldman Sachs, Bitcoin is basically trading like a high-risk, high-growth tech company stock. During bull markets, those companies can be fantastic investments based on the market-beating returns they can generate. However, during bear markets, investors typically seek out less risky assets such as blue-chip stocks and gold. So, as long as inflation concerns and recession fears hover over the economy, Goldman Sachs thinks gold is a safer place to put your money.

In addition, Goldman Sachs argues that "non-speculative use cases" for Bitcoin simply do not exist. In contrast, there are legitimate use cases for gold that always generate demand for the metal. As Goldman Sachs derisively notes, Bitcoin is "a solution looking for a problem."

The primary argument for Bitcoin, of course, is that it has in the past delivered significantly higher annual returns than any other asset. Over the 10-year period from 2011 to 2021, Bitcoin was the top-performing asset in the world, delivering annualized returns of 230.6%. This far exceeded the performance of even the top high-growth tech stocks by a factor of 10. And over its lifetime, Bitcoin has returned more than 17,000% to investors. Contrast that with gold, which historically has delivered paltry annualized returns on a longer-term basis. From 2011-2021, gold's annualized return was just 1.5%.

Until 2022, investors thought they were getting the best of both worlds with Bitcoin -- the potential for phenomenal annual returns plus a safe store of value. But Bitcoin delivered neither this year. Gold, on the other hand, delivered on its promise. In 2022, gold is basically flat for the year (down about 1%), while Bitcoin has collapsed. If you're adding gold to your portfolio, this is exactly what it is supposed to do during down markets. Thus, perhaps it's unfair to compare Bitcoin's annual returns with gold's annual returns. A lot depends on the broader macroeconomic context.

As the digital economy grows, cryptocurrencies such as Bitcoin will play a bigger role in facilitating payments. From this perspective, physical gold will increasingly become irrelevant in a digital world.

There is a case for Bitcoin to reach $100,000 from today's price of about $17,000 within the next five years. That's not me saying it -- it's Goldman Sachs. Flash back to January 2022, when the crypto market had not yet imploded, and Bitcoin was trading at close to $43,000. Goldman Sachs argued that it was eventually going to displace gold as a store of value. Back then, Bitcoin only represented 20% of the "store of value" market, but Goldman Sachs predicted its share could jump to 50% within five years. That growth would, over time, drive Bitcoin's price to the $100,000 range.

When you start doing the math, things get really interesting. Even if you concede that Bitcoin's only worth derives from its ability to act as "digital gold," it's possible to arrive at some fairly aggressive valuations for Bitcoin if you assume that it will eventually replace gold as a "store of value" asset. For example, legendary Bitcoin bull Michael Saylor has calculated that each Bitcoin should be worth $500,000 within 10 years, based on current data about the physical gold market and the maximum number of Bitcoins that will ever be in circulation (21 million).

At the end of the day, I think Bitcoin is a better long-term buy than gold. Even with all of its volatility spikes, it continues to deliver impressive returns over a sufficiently long time horizon. It's hard to argue with a 17,000% return. Granted, we probably can't expect Bitcoin to return the same percentage over the next decade. But if Bitcoin rises from today's price to $100,000 (the price predicted by Goldman Sachs), that represents a return of nearly 500%. I'll still take that.

That said, in the current macroeconomic environment, I can see why some investors might prefer the relative safety of a trusted physical asset like gold. From a portfolio diversification perspective, gold can provide something that Bitcoin can not.

I'm bullish both short term and long term on Bitcoin. Although cryptocurrencies come with enormous volatility and price risk, Bitcoin's ability to bounce back from previous market crashes is particularly noteworthy. It's time to drop gold and buy Bitcoin.

The increase in demand for Crypto currencies has also created a demand for stores and venues accepting them. Due to the volatility of Bitcoin, gold and silver, investors will frequently trade back and forth between the Cryptocurrency and precious metals. is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.

As inflation rages and touches 40-year highs, investors are looking for anything to mitigate its effects on their portfolios. In such times, investors often turn to commodities, in particular gold, which has a long history as an inflation hedge. More recently, some traders have been touting Bitcoin and other cryptocurrencies as alternative ways to hedge inflation. Is one better than another?

When comparing Bitcoin and gold as inflation hedges, experts point to a number of dimensions on which to compare them: their history, effectiveness, ease of access and other sources of demand for the asset itself.

Gold might be relatively easier to invest in, given the wide array of ways to do it, including purchasing actual physical gold, buying ETFs that own physical gold or gold companies, as well as trading futures. Investors have a number of ways to take an interest in gold, depending on what their intent is. Many of these ways involve exchange-traded products such as stocks and ETFs, making it easy and cheap for investors to access their investment.

Though accessing Bitcoin is a bit more complex than gold, Bitcoin promoters have been pushing for similarly easy ways to buy Bitcoin through exchange-based means such as ETFs. For now, traders can buy Bitcoin futures ETFs, which offer similar exposure to the digital currency.

As one of the oldest commodities in history, precious metals like gold and silver have been and likely will continue to be incredibly desirable. Now, you buy gold with a (slightly) newer commodity: Bitcoin (BTC).

Bitcoin rates are always on the move, and this is why payments must be finalized within 15 minutes of order creation. Many Bitcoin exchanges cannot process a payment that quickly, which could result in your order being voided. Needless to say, this can cost time and money and be a frustrating experience. Not only that, but many wallets do not support Payment Protocol, which displays a URL or Payment Protocol QR code to provide the bitcoin address and transaction data securely to bitcoin wallets.

Bitcoin orders clear as soon as they are marked Paid in our system, which typically occurs within one (1) business day. Once the order is indicated as Paid, your bitcoin payment has been processed, and the order has entered the shipping queue.

You can always view the current price by visiting our bitcoin price page. Our bitcoin price charts are an easy reference for current bitcoin prices. In addition to displaying the current bitcoin price, our interactive charts allow you to examine historical bitcoin prices.

Since its establishment in 2008, the online payment system known as Bitcoin has enabled millions of customers to make and receive payments without the involvement of any banks or credit/debit card companies. The popularity of this payment method stems not only from the convenience of its transaction process, but also from the currency it uses, the bitcoin. The bitcoin serves as the single uniform piece of currency within the system, and enables people from different nations to make their purchases without having to concern themselves with current exchange rates. Understandably, it has become a popular means of payment among businesses that deal internationally, including precious metals dealers.

Yet, before customers commit to using this form of payment for their precious metal purchases, it is important to understand some of its potential risks and consequences. Bitcoin is still in the development phase and has many security and privacy issues it needs to resolve before it can be considered a reliable form of payment. In its present state, customers may want to consider more established forms of payment for their gold and silver purchases. 041b061a72


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