Crypto vs. Gold: Which Is the Better Investment?

Gold coins with the Bitcoin logo

April 20, 2023

Gold vs. cryptocurrency. It’s a surprisingly common comparison, even though the two are drastically different investment vehicles. Naturally, we’re inclined to recommend precious metals, but that opinion isn’t based solely on our profession. We firmly believe that the concrete facts support gold as the superior investment for a myriad of reasons.

Let’s get started.

Gold vs. Crypto: Investing vs. Gambling

Fortunes have been made through cryptocurrency, but the opposite holds true as well. Many crypto owners bought at the peak of the boom, and now the value of their investment has dropped significantly.

When weighing the differences between crypto vs. gold, it’s important to note that people who buy crypto are gambling more than investing. Not only is cryptocurrency susceptible to a staggering loss of value, but countless crypto projects have vanished completely into thin air after a rug pull, loss of community support, or simply because of unprecedented volatility.

While sticking with major cryptocurrencies like Bitcoin is safer than purchasing alt-coins, one look at Bitcoin’s price performance chart will tell you everything you need to know. Sure, there’s a chance you could be lucky enough to buy at the bottom and have your investment grow. But there’s a very strong chance that the price will drop again if you don’t time your sale perfectly.

Crypto vs. Gold: Volatility vs. Stability

A cryptocurrency price chart showing extreme volatility

When comparing gold vs. cryptocurrency, stability (or a lack thereof) should be a primary factor to keep in mind. Now, volatility can be beneficial if you’re able to ride the waves buying and selling at opportune moments. However, that’s day trading, not investing.

There’s a common saying in crypto: “Don’t try to catch a falling knife.” This refers to the temptation to buy when a cryptocurrency’s value drops severely to recoup some or all of the loss when the value (hopefully) recovers. Unfortunately, attempting to predict such a volatile market is virtually impossible, and successful knife catches are rare.

A major difference between crypto vs. gold is a lack of predictability. Sure, some people bought Bitcoin when it launched in 2009 and made a fortune. However, many more bought Bitcoin based on hype, only to watch the price plummet when the buzz died down. In contrast, gold has a proven track record for stability and growth dating back countless centuries.

Gold vs. Cryptocurrency: Short vs. Long-Term Investing

Like gold, some people purchase crypto with the intention of holding it long-term, only to realize down the line that they should have sold long ago. Unfortunately, by the time crypto buyers realize their investment is faltering, it’s usually too late.

When choosing between crypto vs. gold, you should have a plan in mind before you spend any fiat. Are you hoping to make a quick buck? Are you planning for retirement? Are you protecting your finances from inflation and recession? The vast majority of crypto investors don’t have a solid plan and are simply hoping their lottery ticket has winning numbers at some point in time.

If you believe cryptocurrency has a strong future, buying and holding long-term and dollar-cost averaging when the price drops are the typical approach. The problem is that dollar-cost averaging isn’t guaranteed. The sad truth is that countless crypto investors have chased that dollar-cost average at lower and lower intervals until they hit their limit.

Crypto vs. Gold: Intangibility vs. Tangibility

Three gold bullion bars

While there are many different types of blockchain-based projects, as a general rule, cryptocurrency is digital money that only has value because its community says so. If every Bitcoin owner decided they didn’t believe in the project anymore, its value would plummet to zero. Crypto’s value is supported by the next buyer. If people stop buying, the value stops growing.

A huge difference between gold vs. cryptocurrency is that there’s zero risk of precious metals becoming worthless. Gold bars and gold coins have intrinsic value that goes far beyond community trust. Gold is a rare, finite object that’s not only beautiful, but highly demanded for real-world applications. That’s a massive factor to consider when comparing crypto vs. gold.

Simply put, gold isn’t going anywhere. It has been a dependable store of value since ancient times, and it’s an irreplaceable industrial metal. Beyond its practical use cases, gold is a symbol of wealth. It’s highly coveted. Owning a string of numbers, a hard drive, or a hardware wallet doesn’t have that same reverence and esteem.

Gold vs. Crypto: Storage Safety vs. Danger

While it’s technically possible to misplace your gold investment, losing cryptocurrency is a whole lot more common. Cryptocurrency requires that you maintain long, complex strings of numbers and letters called keys to access your investment. A big difference between crypto vs. gold is that you don’t hear regular horror stories about people losing their gold.

Owning cryptocurrency is inherently risky. If you write down your key, there’s a chance you could lose it. Or if the wrong person found it, they could steal your crypto with ease. If you store your key online, similar problems can arise. If you store your crypto on a hard drive or hardware wallet, physical damage or loss are major risks.

As you compare gold vs. cryptocurrency, don’t overlook storage. Are you confident you’ll still be able to access your cryptocurrency 50 years from now? Are you confident the digital infrastructure will still exist at all? Many investors who are choosing between crypto vs. gold overlook the big picture, forgetting that technology is constantly changing. Gold, on the other hand, has remained steadfast for thousands and thousands of years.

Gold vs. Crypto: Regulation vs. Manipulation

Many smaller cryptocurrencies are nothing more than scams. Anyone can start a cryptocurrency as the industry is unregulated. So is it really surprising that nefarious individuals and organizations take advantage of investors? Even if a project is technically legitimate, market manipulation is extremely common.

Even major cryptocurrencies have people called “whales.” These are individuals who own substantial amounts of the tokens or coins—quantities large enough to manipulate price in either direction by buying or selling. When comparing crypto vs. gold, don’t overlook the communities behind them. Do you really want to trust your investment to a handful of individuals who could crash the price at any given moment?

Many cryptocurrencies exist solely as “pump and dump” schemes. This means a small number of people hold the majority of the tokens or coins. As soon as the price pumps, they dump everything, leaving everyone else holding worthless cryptocurrency. A crucial difference between gold vs. cryptocurrency is that gold is regulated, and manipulation simply doesn’t occur.

Gold vs. Crypto: Liquidity vs. Illiquidity

A man looking confused while using a computer

Buying and selling cryptocurrency can be a major hassle, especially if you’re not super tech-savvy. A significant difference between crypto vs. gold is the barrier of entry and exit. With gold, you simply buy physical gold like any other product. If you decide to sell, you’ll have no problem finding a buyer who will pay the current market price.

With cryptocurrency, you have to jump through a lot of hoops. You have to sign up for an exchange, giving your personal information to potentially sketchy organizations. Many exchanges have limits on how much you’re allowed to buy and sell, as well as steep fees. Additionally, depending on the cryptocurrency you’re looking to own, you may have to use multiple cryptocurrencies and exchanges.

What’s Your Risk Tolerance?

As you choose between crypto vs. gold, you must decide if the growth potential of crypto is really worth the risk. Sure, you might hit the jackpot, but you’d also have much better odds placing a bet on red at the casino. That said, if you have disposable income and are seeking a thrill, buying crypto might be an exciting move and possibly even profitable if you’re lucky. 

If you’re looking to diversify into a time-tested store of value, gold is the clear choice. As you can see, the difference between gold vs. cryptocurrency is that nobody goes broke buying gold. Buying cryptocurrency is gambling. If you’re willing to gamble with your finances, that’s your decision. Just make sure you understand the high potential for perils and pitfalls before moving forward.

Learn More About Crypto vs. Gold

If you have any questions about the differences between cryptocurrency and precious metals, please don’t hesitate to contact us for a free consultation with a qualified expert. We’ll help you make an informed investment based on your unique financial goals and preferences.

We stock a wide range of gold products at competitive prices, as well as silver, platinum, and palladium. Endeavor Metals is a Tier 1 United States Mint bullion dealer with more than 50 years of in-house experience. We have an A+ accredited grade on the Better Business Bureau and a 4.9 Google star rating.

Last but not least, when comparing crypto vs. gold, consider guarantees. We offer a 7-day, 100% money-back guarantee, even if the gold market has a downturn. You won’t find anything close in crypto! 

Now that you better understand the stark differences between gold vs. cryptocurrency, it’s time to make the clear choice. Preserve your wealth and secure your financial future with gold—a time-tested store of value you can trust.

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