Digital Currencies VS Gold
Digital currencies are an interesting and (relatively) new way of making money for investors. With a recession looming ahead of us, you may be wondering where you’d like to invest your cash to hedge against continuing inflation, as well as to protect your other investments. Digital currencies have been made out to be the “new gold”, but is it? While there is an opportunity to make significant profits, it also harbors significant risk. Keep reading to learn more about digital currencies and whether or not investing in gold is the better judgment for current economical times.
What are Digital Currencies?
According to Investopedia, digital currency is a form of currency that is available only in digital or electronic form. It is also called digital money, electronic money, electronic currency, or cybercash.
Key takeaways, also according to Investopedia, include:
- Digital currencies are currencies that are only accessible with computers or mobile phones because they only exist in electronic form.
- Typical digital currencies do not require intermediaries and are often the cheapest method for trading currencies.
- All cryptocurrencies are digital currencies, but not all digital currencies are cryptocurrencies.
- Some of the advantages of digital currencies are that they enable seamless transfer of value and can make transaction costs cheaper.
- Some of the disadvantages of digital currencies are that they can volatile to trade and are susceptible to hacks.
What is Happening with Digital Currencies?
Lately, you may have been hearing a lot of buzz about digital currencies, also known as crypto, crashing. In an article by CNBC, experts say cryptocurrencies have become more closely linked to other speculative parts of the market such as tech stocks, which are falling due to fears that lofty valuations may come down as the Federal Reserve and other central banks begin to hike interest rates and wind down their huge stimulus packages.
The article continues that the latest declines for bitcoin came in tandem with a rout in global stocks, with the S&P 500 closing out Tuesday’s session in correction territory. Bitcoin’s price has increasingly been tracking moves in the stock market, with a correlation between bitcoin and the S&P 500 steadily rising.
“The correlation between crypto and stocks has been high over the last few months on both inflation-related macro news and the Russia-Ukraine geopolitical situation,” Chris Dick, a quantitative trader at crypto market maker B2C2, told CNBC.
“This correlation shows that bitcoin is firmly behaving like a risk asset at the moment — not the safe haven it was touted to be a few years ago.”
In fact, gold has actually been outperforming bitcoin lately. Spot rates for the precious metal reached their highest levels since June 1 on Tuesday, climbing as high as $1,913.89 per troy ounce.
Is Gold a Better Investment?
Gold has been the most stable and long-standing circulating medium of exchange world throughout history. Gold price in 1920 was $20.65 and the highest gold Price in 2020 is $2021.00. Gold can be purchased from non-government dealers in the form of bars or coins. It is always a good time to buy gold!
Gold offers many benefits as an investment, more so than digital currencies. Investing in gold is the perfect investment for diversifying your portfolio, especially while a recession is looming. Some of the reasons you should diversify investments with gold include:
- Taxes. There are many tax benefits to investing in gold. These include higher after-tax returns, Retirement Savings Contributions Credit, and the fact that the tax amount depends on your income.
- Inflation hedge. According to USNews, gold is considered a classic inflation hedge because its price tends to rise during inflationary periods, and it tends to rise as consumer prices increase.
- Requires little-to-no experience or knowledge. Many investments require a lot of knowledge, expertise, and research. Real estate or opening a business are two examples of investments that require a lot of knowledge and professional expertise. With gold, all you need is a trusted dealer and you are quickly in the game.
About Priority Gold
Although there is potential to make significant profits with digital currencies, the landscape is rocky. It is a risky investment, and if you’re looking for a sure thing, gold is your best bet. Investing in gold is easy, quick, perfect for a recession, and there are many ways to do it.
If you are ready to invest in gold to protect your savings and secure your future, we can help. Priority Gold is one of the most trusted precious metals dealers in the United States with BBB A+ Rating, AAA Rating with Business Consumer Alliance, and 5 Stars Rating with TrustLink.
We specialize in providing precious metals investment services with Security, Liability, and Great Convenience for customers. Our team is committed to helping to streamline their precious metals purchases at a fair price, selecting the right precious metals portfolios, and meeting their important financial objectives.
We offer Free Storage for qualifying Gold & Silver IRA accounts, a fast & easy gold buying process, and smooth IRA Transfer. And gold shows up on schedule. Priority Gold guarantees the highest standards of customer service, which comes with honesty, professional conduct, and the Ethical Code of Business.
For more information, visit us at prioritygold.com