Which is the best Investment?
Tags: Investment, Gold, Investment Research, Finance, Bitcoin

Like other versus fights and heated debates, the financial investment platform has undergone a very intense debate that is all about Bitcoin vs gold — which one is a profitable and superior form of investment. Finding a solution to this interminable discussion, I have put forth my brief justifications of the best from one among these two.

We all know about gold in all forms, be it an ornament, an investment, or a commodity stock for trading, etc. But there are few sides of gold that should be unleashed here. Before that let us begin with the newest form of investment that has arrived last decade and it has gained a good number of investors equally to other investments in the financial sector. That is none other than cryptocurrency.

The crypto market has laid the foundation by revealing Bitcoin to the entire world in January 2009. No one had expected that the currency would be entirely virtual because in 2009 the online transaction technology was not rolled out. So the entire world was new to such technology as a peer-to-peer transaction system.

During the initial days of Bitcoin’s release, none of them treated it as investment material. Because the entire thing was a very unconventional form of handling money and investing money. The entire era was comfortable in investing in deposits, shares, commodities, and other mutual funds, but Bitcoin was considered to be an anomalous way of investment.

Gold vs BTC

After the popular fictitious grapevine about the pizza story that spread very rapidly unlike any pandemic. This happened in May 2010 and the price of Bitcoin(BTC) was less than $0.01. If the BTC transaction had happened for Pizza by that time. By March 2013, the pizza store owner would be having $750,000 (approx.)

Yes, gradually the price of Bitcoin was in the steady phase of the uptrend.

First, BTC started to list at the price of $11.09 in August 2011. As there we are less trading volume done on the BTC, and the initial reception was not up to the mark, the price got slumped to $2.10 in the next three months, (i.e) in the month of November 2011. Until this period, the all-time high of BTC was its listing price — $11.50 and the all-time low was $2.10.

There was a gradual rise from the end of 2011 until mid of January 2012. In the next 2 years, in April 2013, it broke its all-time high record for the first time and made it to $226. The price gradually started to rise and this started to break all the myths on Bitcoin. Meanwhile, the price did not depreciate at any cost, it was steadily towards the heights, maybe I could say, it is like climbing up to a peak of a mountain. At last, Without losing its grip in any places, BTC created a new all-time high that made the haters’ mouth shut by reaching $1101 in November 2013.

Can you be able to see the two rocky cliffs that BTC created during its all-time high?

Until this time, let us parallelly look at the price of gold.

The data which I’m going to take for gold is from 2010, the year Bitcoin was released. To compare both investments the data has to be collected from the same year to date. Because the historical price of gold ranges from the early and mid-twentieth century. So, the price range of gold that I’m going to consider here is the last 10 years.

In August 2011, the price of gold was $1610 per Oz and the trend was steadily raising. During the end of 2011 that is December, the price was falling $63 low and the year wrapped up with $1547 per Oz. That was not a shocking part like how Bitcoin intimidated with a huge fall from $11.09 to $2.10 in three months.

I guess there should be some socio-political factors that could have impacted the price during the later part of 2011. Maybe the earthquake and the Fukushima nuclear disaster might have led to the price drop of these two, that’s my guess, and that may not be cent percent sure, it is just a speculation. Because these are the factors that could affect such financial markets.

From December 2011, after the slight depreciation in the price of gold, later it started to rise from $1539 and progressively to $1789 on February 28, 2012. Since 2012 a leap year, the price dropped to $1710 on the last day of February (i.e) 29th.

Alas! The leap year(2012) has changed the entire trend of gold into a bearish phase where the price started to fall back. From Feb 29, 2012, to May 16, 2012, the price was very bearish.

From the start of December 2013, BTC performs bearish. The BTC market started to roll down slowly from this month I can say from the end of 2013. Because the BTC market trend in 2014 was very bearish. From mid-May 2014, the price hiked around $200 but that is not much sound profit when compared to the previous yieldings.

But that raise didn’t give hope for the future price rise in the BTC during 2014. The price contained till July 2014 then started to fall back again till the end of 2014. Even that still extended till the first two weeks of 2015. That doesn’t mean that 2015 performed very well. From January 2015 till October 2015, the BTC was strongly laying the foundation where it left space for the investors to accumulate BTC at the average price of $230 (Jan 2015 — Sep 2015).

BTC Chart

From October 2015, the price ranged from $230 and raised gradually. After a year BTC enters 2016 in the bullish phase.

Meanwhile, we can check the price of Gold which is gradually fluctuating but not that low or high. The price slumped from $1901(Aug 2015) to $1059 (Dec 2015) which is an unpredictable fall during that time.

Because no investors would have thought this much would fall in the four months. But gold is meant and considered as a long term investment, the four months of a gap would not mind the investors much.

That was the last fall since then because right after that fall, still now gold has not dropped to that low level. From $1054 to $2054 was the highest and maintains the pace. On the other hand, few speculations say that it is very hard for the gold to fall back like before because the pace is now in the bullish trend where there is a limited chance for fall back mostly it won’t happen as per the technical analysis.

With the BTC, the price after 2015 was overwhelming because none of them would have expected this much hike during the very short period. The price of BTC at the end of 2015 was $427 and at the end of 2017 was $19918. That is was history in the journey of Bitcoin and as well as the life of financial market investors to see the huge and enormous profit in the two years.

But I can say 2018 was the bearish year in the journey of BTC because the price dropped from $19918 to $3313 which is inversely proportional when compared to the last year. Bitcoin proved that the price of cryptos can highly volatile. No other investment would give this much amount of loss in one year.

After this, the price of BTC has taken off slightly from December 2018 from a price of $2797 to the price of $42792 which is the new all-time high in 2021. No one has expected that BTC will create a new all-time high in the year 2021 even though the pandemic was spreading.

Let us now discuss which one is best based on the investment perspective. Yes, when it comes to investment, it is completely meant for the long-term purpose and naturally, the price has to be very stable and steady that should gradually raise. By having these criteria, I can sort that gold is the best option for the people who are willing to invest on a long-term basis. Because it is obvious that gold is not highly volatile in the terms of price.

But the other side BTC is highly volatile in the terms of price. From our analysis, you would have come to the conclusion that BTC is bullish in a year and bearish the next year. The price is unpredictable. Whereas with the gold, it is not volatile this much amount. The price will act very gradually either up or down.

My Take

So it is very safe it invest in gold rather than preferring to invest in Bitcoin(BTC). Because gold offers so many investment types like a sovereign bond, gold bars, ornament, and jewels. Also, investing the gold is said to be the mid-low risk where it does not create a huge amount of high-risk appetite that BTC has. Yes, every investment has its risk levels. Knowing that you can trade or opt for an investment based on its risks.

Likewise trading any cryptocurrency will come under high-risk investment. Because the entire investment and trading are based on speculation and the high price fluctuation. The investor might end up in a huge loss if crypto did not perform well.