How Cryptocurrencies Can Affect The Value Of Gold?

With the global pandemic raging, the last year or so has seen lots of ups and downs in the world of investing. Cryptocurrencies such as Bitcoin have seen massive gains in their value, only for them to see significant drops as well. Gold has also seen a considerable increase in its value over the last year, with record prices reaching as high as USD1900 per ounce, making it a desirable investment.

However, some people predict gold to increase in value significantly, and the catalyst that may make this happen is the volatility of cryptocurrencies.

Below is some more information on the subject that may make you want to dump your Bitcoin and invest in gold instead.

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Why Cryptocurrencies Are So Volatile?

Cryptocurrency is a niche market, with many people not owning any, although many have gold in their possession, even if it is only jewelry. People have predicted that cryptocurrencies will move into the mainstream, with people able to make a variety of purchases using their Bitcoin and other cryptocurrencies. However, this is still yet to come about fully, and although you can make purchases using your Bitcoin, it’s something many retailers do not have in place yet.

Companies like Tesla stated you could purchase one of their vehicles using Bitcoin, which saw a massive surge in their value. Not long after, the CEO of Tesla, Elon Musk, later said that they are putting it on the back burner until Bitcoin mining becomes more eco-friendly, which wiped off 10% of the value of Bitcoin.

Living In Uncertain Times

With the times that we live in being so uncertain, people are looking for safe havens for their investments, and shying away from ones that are volatile. Many people have liquidated much of their cryptocurrency investments and are looking for safer places to keep their wealth safe, which has seen them turn to the likes of gold – often said to be an excellent hedge against inflation.

With more people looking to invest in gold, it pushes up the demand, and as gold is a commodity, it, in turn, increases the price. There is a finite amount of gold and other precious metals on our planet, and once the resource dries up, the price is going to increase significantly. If you are looking to invest in gold, you may wish to speak to reputable Brisbane gold dealers such as City Gold Bullion or the reputable dealers in your location sooner rather than later, before the price goes up again.

Bitcoin also has a finite number of coins available, and initially, there was only ever going to be a maximum of 21 million Bitcoins available. However, unlike with gold, Bitcoin can change and increase the number of coins, which can significantly affect their value.

Ultimately, the best investment portfolios are diverse ones, and it pays to not put all your eggs in one basket, including gold. It may be lucrative to continue investing in cryptocurrencies if you are careful, and you can channel any profits you make into precious metals. Diversifying your investment portfolio can help you prevent seeing your wealth wiped out when a market crashes, and you may even profit with your other investments if this happens.

Also read: Cypto Exchange Security

© Ruchie Verma.

Disclaimer: I write this post as an informational part, please read all guidelines carefully before investing in financial transactions.

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Ruchi Verma

Certified parenting teen practitioner, multiple Award winner, mother of two active kids believes in sharing the right source of information to readers which could help them in every possible way!!

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  1. Investing in Gold has always been a wise decision.But times are changing drastically. W have seen the in past one year. As you said, getting a professional help is always better.

  2. yes dear agree cryptocurrencies are volatile and in recent stressful situation of pandemic, people are looking for more safer options. will keep your suggestion of city bullion in mind, if make a plan to invest in gold in future.

  3. But many people are aware about bitcoin and probably that’s the reason they are not very comfortable investing in it. Gold is ashtrays preferred choice over bitcoin as it is not just seen as an investment.

  4. Have been hearing a lot about cryptocurrencies and your post help shed light on it. Investing in gold has traditionally been a safe option but we should diversify.

  5. For me investing in gold is the best investment and secure too. Every year I try to invest a small amount in it for better future for my kids. And I agree at the time of investing it is necessary to take professional advice

  6. This is an informative post. I was not aware of the impact that cryptocurrencies can have on the value of gold. Learned a thing or two today about the relation between gold and cryptocurrencies.

  7. This was quite an informative blog, Ruchi. Thank you for sharing this, I had no clue that volatile currency such as cryptocurrency can actually affect the value of Gold as well.

  8. The term cryptocurrency is fairly new to me though I had some basic idea. Your post indeed added to my knowledge

  9. Crypto currency is a new craze that has hit the investing market but as you said correctly it is very volatile and gold is always the safest bet one can place.

  10. O yeah. Investing in Bitcoins is volatile. A good info, my brother is contemplating on investing, shall ask him to read this one.

  11. The Other Brain Inc.

    I have always been vary of cryptocurrency. Plus due to the pandemic now there is a lot of confusion in the market. I will explore about City Bullion for sure.

  12. We have been investing for years now and understanding the overall market situation it’s important to invest in places that do not cause many losses. Given the current circumstances, we cannot afford to lose money over unwanted investments. I really liked this post around cryptocurrencies and how it affects the gold value.

  13. Most Indians believe that investing in Gold has always been a safer option. But the world has taken note of the power of crypto currencies since no intermediaries are involved. I will wait and watch for sometime.

  14. This is a really important article on investment in gold. We have to be careful while choosing the right way of investment.

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