Cryptocurrency investment instruments are currently popular among young generations, more so than traditional investments like stocks or gold. So, what’s the difference between Bitcoin and gold that makes Bitcoin more appealing to many young people for trading?
However, before making any investment, you need to choose a reliable crypto trading platform. The numerous apps or platforms available can confuse new investors in selecting the best crypto platform.
As a recommendation, you could use the Pintu app for crypto trading, where you can easily exchange BTC / IDR. Be sure to also check the transaction fees for each trade you make.
In the world of investment, Bitcoin and gold are often viewed as assets with the potential to provide returns. But before you decide to invest, it’s important to understand the differences between investing in Bitcoin and gold. Let’s take a closer look at the comparison of these two assets.
What is Bitcoin?
Bitcoin is a type of digital currency that operates on a peer-to-peer network, using blockchain technology to confirm and record each transaction. Bitcoin was introduced by Satoshi Nakamoto in 2009.
What is Gold?
Gold is a precious metal that has been known since ancient times. It has been used as currency, a store of value, and in jewelry and other valuable items. Gold is also considered a stable and safe investment asset because its value tends to increase over time and provides a good hedge against inflation and economic uncertainty.
Risks of Investing in Bitcoin vs Gold
The investment risks between Bitcoin and gold can be understood from various aspects:
Price Volatility
Bitcoin tends to have higher price fluctuations compared to gold. The price of Bitcoin can change drastically in a short period, while gold tends to be more stable.
Impact of External Factors
Gold prices are influenced by various factors like the global economy, inflation, exchange rates, and monetary policies. On the other hand, Bitcoin is often influenced by factors within the crypto ecosystem, such as adoption, regulations, and market sentiment.
Physical Ownership
Gold can be owned in physical form, such as bars or coins, which provides protection against volatility. Bitcoin, however, exists only digitally and is stored in a digital wallet, making it vulnerable to cybersecurity risks.
At a glance, both gold and Bitcoin serve similar functions. However, if you’re looking for a more profitable investment, you might want to consider the following factors:
- Form of Asset
In addition to being popular as jewelry, gold is also a profitable investment option due to its stable price. This investment asset comes in two forms: physical (precious metal) and digital.
For physical gold, the owner can store it personally or in a vault provided by financial institutions. Digital gold, however, is stored in a contracted company. On the other hand, Bitcoin is purely digital.
Bitcoin, created by Satoshi Nakamoto in 2009, cannot be stored physically. It exists as a balance recorded in a public ledger known as the blockchain. Bitcoin is stored on personal computers in the form of a wallet file.
- Availability of Assets
In ancient times, gold was used as valuable currency. This historical use is what makes this precious metal a great investment choice. Gold is valuable because it comes from limited and rare natural resources that are not easily discovered.
Unlike gold, Bitcoin is a digital asset with limitless potential. Investors can transparently track the number of Bitcoin available in the market. The total supply of Bitcoin is capped at 21 million.
As of January 2022, 18.92 million of these Bitcoin have already been mined. Knowing how many Bitcoin remain available allows investors to estimate when Bitcoin will run out. Additionally, investors can observe price changes and predictions for Bitcoin’s future price.
- Price Determination
As you might know, the price of gold is influenced by various factors such as global uncertainty, supply and demand, monetary policy, inflation, and the exchange rate of the US dollar. When the Rupiah depreciates against the US dollar, the price of gold tends to rise.
At the same time, when inflation increases, the price of gold also tends to rise. This does not apply to Bitcoin. The price of this crypto asset is not controlled by a centralized system for buying and selling. One factor that influences Bitcoin’s price is market developments.
Furthermore, Bitcoin prices can also be influenced by social media. Sellers are often swayed by celebrities or influencers. For instance, the price of a crypto asset can experience a huge spike simply because Elon Musk tweets about it.
The price of Bitcoin is also determined by demand from traditional financial sectors and large corporations. This means that the more people or companies buy Bitcoin, the higher its price will go.
On the other hand, another factor influencing Bitcoin’s price is its legal status and clarity regarding regulations in a given country.
- Risk Factors
Although gold tends to have more stable prices, there are still some risks you need to be aware of. One risk is the possibility of counterfeit gold. If you’re not familiar with the gold’s content and purity, you might be deceived by fake gold.
Another major risk with gold investment is the possibility of losing your money. If gold is not stored safely, it could be lost. Therefore, it is important to store gold securely, either in a safe or with a bank or pawnshop.
At the same time, one risk with Bitcoin investment is its higher price volatility compared to gold. In general, the price of Bitcoin and other crypto assets can drop by more than 20% in a short time.
However, you can also see rapid gains in Bitcoin. Another risk is the lack of guarantees for your investment. Hacking is one reason why investors may lose their Bitcoin.
Additionally, you need to be cautious of online transaction scams. Business players should be especially careful of cybercrime or hacking attacks.
If you’re considering investing in crypto assets like Bitcoin, it’s best to choose an app that is regulated by the Commodity Futures Trading Regulatory Agency (BAPPEBTI). As a recommendation, investors can make their crypto investments through Pintu.
For those who want to invest in crypto easily, download PINTU now! PT Pintu Kemana Saja, with the PINTU brand, is a platform for buying and selling crypto assets in Indonesia. The PINTU app is designed with an intuitive interface that is easy to use, along with in-app educational content, particularly for new and casual crypto investors.
Currently, PINTU offers more than 200 crypto assets for trading, as well as many innovative and educational features such as Limit Orders, Auto DCA, Pintu Earn, Referral System, PTU Staking, and Pintu Kelas Academy.
Start investing and download the PINTU app now!
