Bitcoin or Gold: Which is a Better Investment
With rising gold prices and a declining currency, many people are considering investing in bitcoin. But will this pay off in the long run?
The ongoing war between Russia and Ukraine has affected the market in many ways, with oil prices rising, gold prices soaring, as well as many countries suspending their businesses and boycotting Russia altogether. What's more, the value of the Russian ruble has taken a nosedive following these events. And with many fearing the precarious position of the market, they've turned to investments to protect their hard-earned money.
One option includes cryptocurrency—specifically Bitcoin. While skeptics call it a bubble waiting to pop, advocates claim that cryptocurrency can be used to store value over time, especially in times of stress like this.
Bitcoin Trade on the Rise
But here's the thing: Bitcoin now is trading about 4% higher, while the price of gold grew by almost 5% since the invasion of Ukraine two weeks ago. With Bitcoin notching far larger swings than gold and remaining more than 40% below the record it achieved this past November, cryptocurrencies have held up better than stocks and gold since the war started. That's considerable growth, given that their trading was more closely correlated in the past.
Why is that? For one, aggressive sanctions have cut Russia's access to many global financial systems, with international payment systems being suspended and many businesses boycotting the country. Next is the state of the Russian ruble following the war. In fact, data from Arcane Crypto showed that trades, where the Russian ruble was exchanged for Bitcoin, have spiked since the invasion, which goes to show that cryptocurrencies have real value.
This has caused many countries, institutions, and even individuals to look into alternatives on moving their money around the globe. "The reason that it has somewhat retained [its value] is the market viewing it as an alternative to traditional finance," Lux Thiagarajah, the head of trading at crypto business banking partner BCB Group, tells CNN in an interview.
