Editorial Team

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.

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*Important information and disclaimers

The above does NOT constitute an offer, solicitation of an offer, nor advice to buy or sell specific securities. The opinions listed above are not the opinions of Unifimoney Inc. or Unifimoney RIA, Inc. but represent the opinions of independent contributors. These contributors may or may not hold positions in the stocks discussed. Investors should always independently research any stocks listed and form their own opinions, while recognizing that any investments made may lose value, are not bank guaranteed and are not FDIC insured.