Will Bitcoin Become the New Gold for Cryptocurrency Age? (part 1)

Bitcoin is ready to the throne

Bitcoin VS gold? Although it doesn’t seem right to compare the digital asset with gold, we cannot deny that there are similarities between them. As the No.1 cryptocurrency Bitcoin is gaining more and more popularity, many believe that Bitcoin will be the gold of the Crypto Age. This is possible since Bitcoin has shown some quality features that are reminiscent of gold.

As a medium of exchange, the only difference between Bitcoin and gold is that the cryptocurrency lacks a physical form. Moreover, the value of gold has been recognised for decades while Bitcoin and other digital currency has just formed a few years ago. Despite these few differences, they have more in common than you might think.

Bitcoin is the New Gold

In this review, let’s look at some of the major ways Bitcoin compares to gold and the reasons why it may be considered the new gold on the market today.

Check out this summarization of the two commodities similarities:

1. Scarcity

What determines the value of major currencies in the market today is demand and supply. In the cases of Bitcoin and gold, both are scarce and have a limited cap production mainly due to increased demand.

The value of Bitcoin has increased dramatically over the past few years, and that explains its reduced supply. In the future, we expect to see more scarcity in the market if the value of Bitcoin stands.

Over the years, gold has been the most valuable metal in the world, and it still is even in the current market. The value of gold is mostly associated with the highly limited quantity in the market approximately 171,000 tons.

2. Value

Over the years, gold has maintained its value; it averages annually at a rate of approximately $1,000-$1,200 per ounce. In the year 2000, gold was priced at about $200 per ounce, and once it bounced back from these low values, it became a valuable long-term asset in the market.

Initially, the value of Bitcoin was quite low; it was only being traded for a few dollars. Over the last course of 2017 however, Bitcoin has experienced many ups and downs, it’s highest up reached almost $20,000, but it has since fallen down again, maintaining its value at approximately $6000. No other cryptocurrency has taken the no.1 spot on the crypto market.

Currently, gold is valued at around $1200 while Bitcoin is valued at about $6338. The biggest uncertainty surrounding Bitcoin is its stability; as a currency, its value has been highly volatile on the market. As for gold, over almost two decades, its value has steadied encouraging regular investors and governments to invest in it. It seems that for Bitcoin to reach the same steady level as gold and counteract its instability, investors will need to invest long-term.