Bitcoin as an Alternative to Stocks and Gold?

Bitcoin as an Alternative to Stocks and Gold?

The beginning of 2020 was great for Bitcoin. In 12 months between January 2019 and January 2020, the value of Bitcoin went up 155%. Last year, the Bitcoin market cap hit $185 billion. The most popular cryptocurrency in the world entered the new decade with a lot of promise.

However, all of that changed once the Coronavirus pandemic started. The price of Bitcoin experienced the biggest daily drop since 2013 and dropped to $3,600. All of a sudden, people were not too keen on Bitcoin as they were just a few months ago.

The U Today even pronounced Bitcoin dead for the 380th time. You’re probably not thinking about investing in Bitcoin now even if you thought about it before. Investing in stocks and precious metals seems like a much better idea at this point, right?

Well, guess again…

The Impact of Global Events

Currently, every industry sector has felt the impact of the ongoing crisis. The crypto market is experiencing turmoil, however, the stock market isn’t doing any better either. Just a few days ago, the American Stock Market experienced its worst day since 1987.

The crisis we’re currently experiencing has also affected the precious metal industry too. That isn’t too surprising, seeing how it struggled throughout 2019, due to America’s trade war with China. The price of gold has been steadily going down for the last week. Gold is now down around to $1500 per ounce.

Gold sales are down as well. In the US, retail sales only fell by 0.5%. Things are much worse in China, were gold sales dropped 20.5%. China’s industrial production is down as a while. In February, when the virus outbreak started, their production was already down 13.5%.

The point here is, you can’t really judge the value of cryptocurrencies by looking at the current data since the crisis has affected it significantly. You should look at the numbers from the previous 10 years if you want to know whether Bitcoin is a good alternative to stocks/gold or not.

Bitcoin vs. Stocks

Although some people think that Bitcoin completely crashed after the initial boom, that’s simply not the case. In the last five years, the world’s first cryptocurrency has had a strong performance on the market and has given strong returns to its investors. 

Bitcoin is also not showing any signs of slowing down. More and more people are starting to use it every day. Bitcoin’s blockchain now processes around 4 transactions every second, which significantly more compared just a few years before

When talking about stocks, we have to mention the group of major tech companies, dubbed FANG. The group consists of Facebook, Amazon, Netflix, and Google. Their stocks have performed extremely well over the course of the last decade When it comes to investments, one has to measure up to FANG.

Comparing Bitcoin returns with FANG stocks, we come these conclusions:

1. Bitcoin is Maturing Faster and Faster

Bitcoin is slowly becoming a viable option for people looking to diversify their portfolios. For instance, you would make a profit if you bought a certain amount of Bitcoins at any moment in the last five years. Now that the market is becoming more stable, more people are viewing it as an investment option.

2. Bitcoin is More Productive than FANG

This may surprise a lot of people, but if you check the chart we linked to above, you can see that Bitcoin has managed to outperform the asset of each FANG member. Bitcoin’s returns have been stronger than any asset class these companies had to offer, despite Amazon being bullish.

3. Bitcoin is a Great Independent Option

Traditional stocks and assets usually group. Bitcoin, on the other hand, is almost completely independent of things like 3-month reports, market performance, and other factors that have a tendency of distorting the market. Bitcoin is actually a great alternative to traditional assets.


Bitcoin vs. Gold

As we discussed before, gold is now on a five-year low in terms of price. While gold will always remain a good investment option, you can clearly see that huge event like a pandemic can impact the worth of your investment and change your plans.

However, in terms of investment safety, Bitcoin is not up there with gold yet. Gold has had a functioning weighing, tracking, and trading system in place for centuries at this point. Plus, it’s almost impossible to steal or sell fake gold on the market.

Of course, keep in mind that corrupting Bitcoin is certainly hard, thanks to its decentralized system, strong encryptions, and top-of-the-line algorithms. The low price of gold presents a great opportunity for people to perhaps invest in both options and see which one fairs better.

Bitcoin as a Long-term Investment

The main problem people see with Bitcoin investments is the market’s volatility. The price of Bitcoin tends to fluctuate on a daily basis, which is why some people still don’t feel they can invest even a portion of their money into the cryptocurrency.

But with more adoption, the market’s volatility is going to drop. With countries like Australia, Venezuela, and India going through financial difficulties, the global adoption of Bitcoin is only going to increase in the following years. Convenience is another thing making Bitcoin more widespread.

Instant access to crypto investments has made things a lot easier for would-be Bitcoin investors. With services like NordikCoin, you can now set up an account and start buying Bitcoins in a matter of minutes. You can even withdraw your money as soon as you buy or sell your coins.

Ready to Invest?

Even though Bitcoin is a valid investment, you should still keep in mind that the technology is new. You need to take time to familiarize yourself with the technology behind Bitcoin, its history, and the community before making any investments. Make sure to make smart decisions guided by actual historic data.

We hope that you found our article engaging and helpful. Do you have any investment experience? Have you thought about Bitcoin as an investment? Tell us all about it in the comment section below.