Gold vs. Bitcoin: Here's What You Need to Know

Gold and Bitcoin (and more widely precious metals and cryptocurrencies) share a number of similarities and some startling differences. However, both should be considered as part of an overall diversified strategy.

Similarities between Gold and Bitcoin

• They are both mined (albeit in very different ways).
• The value of both of them is largely driven by sentiment rather than inherent value.
• Both are often seen as ways to diversify a portfolio or as a hedge against fiat currency. inflation brought about by what some see as unsustainable fiscal and monetary policies.
• They are both supply limited (at least on earth) with a total estimated tonnage of gold available in the world is 250 tonnes (of which an estimated 25% is still in the ground) and the total available Bitcoins of 21 million.
• Retail investors hold the majority of each of these assets. 46% of gold is held by consumers (primarily as jewelry) and a further 22% in investments, while 96% of Bitcoin trades are estimated to be made by retail investors.
• Lost treasure — an estimated 3.7m Bitcoin have been lost (e.g. thrown away hardware worth over $100bn) and an estimated $60bn in gold is lost as sunken treasure, not including countless rings and coins lost on land over the millennia.
• They are easily portable.
• They are both near universal mediums of exchange.
  

Differences between Gold and Bitcoin

• Governments love gold and hate Bitcoin — US government holds an estimated 5% of all gold reserves and 0% of Bitcoin.
• Gold and other precious metals have long established uses in industry while Bitcoin’s utility is only beginning to emerge.
• Gold is ancient, having been in use as a store and medium of value exchange for over 5,000 years. Bitcoin is just 12 years old (created Jan 2009).
• Gold has about 20% the volatility of Bitcoin.

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The argument rages on whether Bitcoin or Gold is the better investment. But here is the good news. You can have both:

"I would probably pick Bitcoin but why not both? Gold and Bitcoin have a very similar aspect to the portfolio. I would add gold as a diversifier. I would add Bitcoin as a diversifier. The hedge is diversification. Bitcoin is a tool to get there. Bitcoin is a hedge to losing money to something stable." — Mike Venuto, co-portfolio manager of the Amplify Transformational Data Sharing ETF, a $1 billion ETF.

Unifimoney makes it easy to invest in both precious metals and cryptocurrencies in one app. We offer fractional investing from as little as $1 in Gold, Silver and Platinum and 26 cryptocurrencies. If you prefer to invest via individual company equities or ETFs, we have those as well.