Bitcoin, Ethereum, and gold have recently been in a battle for hegemony. This is a result of rising inflation and investors looking for the best way to hedge it. Gold has been a globally recognized and valuable store for hundreds of years and has been a reliable leader in inflation hedging, but this reality is changing rapidly.
Bitcoin, known as Digital Gold, has proven to be the number one candidate for inflation hedging. Outperformance of digital assets has become an investment of choice not only for Ethereum, but also for those who are trying to exceed inflation. Some believe that gold remains the best storehouse for value and inflation hedging. However, the performance of these assets as a whole is another way of saying it.
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Bitcoin, Ethereum are better than gold
By 2021, cryptocurrencies generally recorded remarkable growth. Driven by recruitment, digital assets such as Bitcoin and Ethereum hit record highs. Both assets are heading towards the end of the year and are at least double the value of the same period last year. But gold had no such luck. With Bitcoin and Ethereum returning double-digit and even three-digit ROIs, gold investors are only seeing losses.
This report from IntoTheBlock outlines how poor gold performance is compared to the digital version. In 2021, Bitcoin rose 71.8%, while Ethereum earned up to 456%. Gold has tended to be negative, with a total ROI of -5.26%.
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Gold has been a disappointing year so far, given that annual inflation has reached 6%.
NASDAQ and S & P performed better than gold for the year, with positive returns, but outperforming both Bitcoin and Ethereum. NASDAQ’s annual return was 26.54%, while S & P was 25.82%.
With the old, with the new
Gold has been an investment of choice for those who are stable but want long-term profits. It is considered a low relativity risk asset that doubles as an inflation hedge. This is because even the central bank is widely accepted as a recognized and valuable store. Given this, it has been a form of currency and investment for over 2,000 years.
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But as the times changed and the world moved to technology, gold competitors emerged. At this point, more than a decade of Bitcoin has gained more support than gold as an investment vehicle, especially among young investors.
The study found that since 2020, millennial generations have found it safer to invest in Bitcoin than precious metals such as gold, and are choosing digital assets over stocks. This is even more in 2021, as CNBC’s recent research showed that more than half of millennial billionaires own at least 50% of their assets in Bitcoin and plan to buy more. It became noticeable.
Featured image from Bitcoin News, chart from TradingView.com
