The Covid-19 pandemic has taught us many lessons about various aspects of life, but one of the most important ones was about savings and investments. Those who made wise and calculated money decisions were the ones whose lifestyle was left uncompromised during the tough phases of lockdowns.
What we have seen during the pandemic is that people have moved into safe haven assets. Investments in gold have given good returns. But diminishing the shine of yellow metal, the cryptocurrency outperformed gold. This is why cryptocurrency is the new hot cake in terms of investment.
Earlier, the traditional move was to hedge the volatility of stocks with gold. It was a very effective method in the past, but a new alternative has emerged that challenges the old school safe haven method.
What speaks in favour of gold?
Yellow metal is valuable as a material for making consumer goods such as jewelry and is not widely available.
Regardless of demand, supply remains disproportionately low.
Gold cannot be manufactured. The company can issue new shares, the federal bank can print dollar bills, but there is no such case with gold. It must be dug up from the ground and processed.
What speaks in favour of cryptocurrency?
Bitcoin is a blockchain-based cryptocurrency that shares some characteristics with gold. In fact, many have called Bitcoin "digital gold" in the past due to its weak relationship to all other assets, especially stocks.
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