Topic: [2017-08-16] Some Investors See Bitcoin Better Than Gold, Morgan Stanley Says (Read 3298 times)

Many people are like Mr. Price right now, they are looking at Bitcoin and express amazement of its continuing growth yet they are still careful because if you compare Bitcoin to other fiat currencies indeed Bitcoin is so young and remains to be untested in many situations.

The question is: Is Bitcoin better than gold? I would say that in some aspects yes and in some areas of concerns maybe no. Bitcoin has the best return of investment rate so far among all the available investment medium we can find but in relation to that it is also very volatile and this something that gold is not.

Now, if you ask me which I would prefer if I have lots of money to invest...I would invest in both.

Gold is precious because it's scarce and resistant, and Bitcoin excels gold in both of those properties.

Supply - there will be only 21 million Bitcoins, while no one knows how much gold there is on Earth or even in Solar system. Bitcoin is also deflationary, because from time to time private keys get lost, and it's unknown how many coins are already gone - most notably, people suspect that Satoshi will never move his 1 million BTC.

Durability - private keys/seeds can be copied and stored in multiple places, or even in one's own mind (12 words are not that hard to remember, if you practice it every day).

Basically, Bitcoin is much better store of value, even though it's limited to digital world.

If you look at how Gold has been performing throughout the last years, it hasn't been all that great at serving as an effective and worthwhile way to hedge inflation. Bitcoin on the other hand, experienced a massive amount of growth throughout the years, and has plenty of more growth potential in the forthcoming years. People will more and more realize that the good old and often seen as safe Gold asset, isn't all that beneficial for them anymore. In nearly all aspects, Bitcoin surpasses Gold effortlessly. The only handy advantage that Gold has over Bitcoin, is that it can serve as a currency tool in physical form in offline circumstances. I am not a Gold holder at all, but if I was, I would immediately convert +90% of my Gold assets to Bitcoin back in the early 2013 days.

Bitcoin’s meteoric rise is leading some investors to argue that bitcoin is a better hedge against inflation and turmoil than gold, according to Morgan Stanley.

Tom Price, a London-based equity strategist, said he’s been fielding more cryptocurrency questions after prices recently soared past $4,000 a bitcoin, a fivefold increase from November 2016. Both bitcoin and gold offer similar benefits as a store of value, such as being fungible, durable, portable, divisible and scarce, but it’s too soon to call bitcoin a superior investment, he says.

"Over millenia, gold has demonstrated its ability to endure and preserve value under all circumstances," Price said in an Aug. 14 report. "By contrast, bitcoin’s global platform literally requires the lights to stay on."

The enthusiasm for bitcoin has reached a frenzy in recent weeks as more companies roll out improved trading technology. Earlier this month, a plan to move some data off the main network was activated in an effort to quicken trade execution and broaden access, helping to fuel the optimism.

By comparison, moves in gold have been muted. Prices are approaching $1,300 an ounce after climbing 11 percent this year on the back of a weaker dollar and worries over heightened military tensions between North Korea and the U.S.

Morgan Stanley’s Price said bitcoin is closer to a fiat currency than commodity and a good medium for money transfers because of cheaper transaction costs.

While gold has been slowly marginalized by the rise of fiat currencies over the centuries, a lot of time and trust-building will be needed before it becomes clear whether bitcoin will also undermine demand for the metal, he said.

“The popular view that this immature currency is superior to gold as a hedge against inflation/uncertainty, still needs to be tested,” Price wrote.

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