Why is Bitcoin worth more than gold?

Protective assets are investment objects that do not lose their value in the face of cataclysms and crises. Investments in protective assets contribute to the preservation of capital. These include yellow metal and cryptocurrencies.

The expediency of investing in gold

1. A fall in stock markets leads to an increase in the price of gold. By selling assets that are sharply losing their price and buying gold, investors try to reduce the risks of their investment portfolio by purchasing shares of gold mining companies, gold futures or index funds ETFs. The crisis of 2020 caused an increase in the prices of gold and other precious metals.
2. The collapse of stock markets can lead to the opposite effect. To cover stock losses, investors are forced to sell gold from their reserves. The number of offers on the market is growing, which leads to lower prices. Over time, the price rises again.

But there are some disadvantages to investing in gold. This precious metal does not generate profit by itself, and paying taxes and selling expenses is an additional expense item.

Bitcoin is a very attractive asset

He has many virtues. And in 2020, it began to be compared with gold, including Bloomberg – "cryptocurrency is becoming a digital version of gold."

• The availability of Bitcoin derivatives has increased. Futures have been launched on a number of classic exchanges.
• The infrastructure for storing digital assets is developing.
• Bitcoin is perceived as an alternative to traditional currencies. Devaluation policies and currency wars undermine confidence in fiat money. Therefore, the limited issue of bitcoin is the most important advantage.

Bitcoin is just over a decade old. He is the brainchild of the digital world, a reflection of our reality. He became a part of the lives of many citizens and was recognized. And a world without cryptocurrencies is already unthinkable.

A stratum of people has formed who abandon fiat currencies in favor of digital ones, believe in bitcoin, and support it. The number of investment projects, cryptocurrency exchanges, and wallets is growing. Cryptocurrency has a certain, though not always positive, reputation. Exchanges and services offering specific services in exchange for bitcoins are, at least, convenient.

Bitcoin has increased its value. It is the most popular digital asset, with a capitalization of 60 % of the cryptocurrency market. But it is still a high-risk asset, although many experts are confident that despite the high volatility, it is no longer in danger of a complete collapse.

A comparative description of bitcoin and gold will help you understand why bitcoin is more expensive than gold?

General features:

1. Limited issue. The release of bitcoin is limited by the program code. Only 21 million coins. Gold reserves are limited by nature itself.
2. Decentralization. Easy to recognize, hard to fake.

Differences and/or advantages:

1. Bitcoin is more convenient and easier to use as a payment unit. In a couple of seconds, it can be sent anywhere in the world and the transaction can be tracked. Gold cannot be used in this role.
2. Additional costs are not required for storing BTC. Gold requires renting and paying for a safe deposit box.
3. Security. If the cryptocurrency is stored on a private cold wallet, it cannot be stolen. But it is possible to lose completely if you lose your private keys and the seed phrase. Gold can be stored in a safe deposit box, but this is not a 100 % guarantee against theft.
4. No one has control over BTC. Gold is more difficult. The state can freeze it in a crisis situation.
5. The divisibility of Bitcoin. It is easy to break it into pieces. The bargaining chip is Satoshi. 1 Satoshi = 0.00000001 BTC. Gold bars or expensive coins are not divided into parts.

It's not worth straining to figure out which is more promising – gold or bitcoin. It looks like a dispute over which is cooler – hard or cold.