Gold, unlike other precious metals, has stood the test of time and played essential roles in many cultures as a constant form of wealth. Other valuable materials never seemed to be as timeless and persistent as gold. Gold’s value comes from the metal’s scarcity as a form of wealth. The ability for it to be easily converted into almost any economic system for goods or services is one of its most redeeming qualities.
Gold and Bitcoin are similar in many ways except in the category of age. While Gold has been around for most of human history, bitcoin is still in its infancy as currency. As time goes on, however, some experts are saying Bitcoin could surpass gold as a trusted fallback asset.
Last year, Bitcoin rose drastically from only $1,000 to $19,000. With gold remaining around $12,000 an ounce, there was much talk about Bitcoin overtaking the age-old metal.
How and Why Has Bitcoin Climbed in Ranks Recently?
Most likely, the rise in price and therefore the market correction is due to FOMO, or Fear of Missing Out. Gold saw this type of inflated values during booms and busts of mining. This raise is not a strong argument for Bitcoin’s rise in the economy, especially when considering if it will surpass gold’s place.
President of Zaner Precious Metals and physical market broker, Pete Thomas says he has seen many getting into the cryptocurrency market.
Like gold, Bitcoin thrives through its scarcity. The commodity of both gives it the value it has in a supply and demand market. As time passes, Bitcoin will become less available while gold will continue as it always has.
At a time there will only ever be 21 million Bitcoin. At least Seventy-five percent is already in the system. At the time all of it becomes available, that is when Bitcoin becomes finite. Only then is when experts say the market will find its steady pace.
Meanwhile, Gold for the foreseeable future will be introduced around the rate of 32,000 metric tons. This rate adds 1.7% to the stock total of gold mined per anum. It ensures gold prices will rise and fall with other commodities.
Critics use gold’s ancient history as a safety line against crashing currency markets during troubled times. They say it is a decentralized and universally recognized commodity that has value. Those for Bitcoin agree, saying that cryptocurrency is the same way.