Leading market players have compared Bitcoin and Gold on the grounds of a speculative investment platform and a safe-haven. Gauging the two assets in terms of returns, it shows Bitcoin might have an upper hand after all.
Data gathered Buy Shares indicates that $1 invested in Bitcoin over ten years ago would have a staggering return of $183,617.32 today. Investors who put a dollar in Bitcoin nine years ago would have generated $682.37, a difference of at least 260 times compared to the ten-year returns. The investment as of eight years ago would return $1,113.54. Our research overviewed the returns from 6th October 2009 when Bitcoin first had a market price and July 27th, 2020. The lowest returns would have been recorded in investment from a year ago at $0.98, the only time it was below the $1 mark. Generally, the one-dollar returns in Bitcoin have been growing gradually over the years.
An overview of Gold’s performance during the same period shows that the precious metal would return $1.58 after ten years for $1 investment. Notably, over the ten years, Gold’s return’s have remained fairly constant averaging at $1.44. During the period, Gold’s highest return on a single dollar would have been recorded five years ago at $1.75. One year ago, the dollar investment in Gold would have generated an additional $0.33. Unlike Bitcoin, Gold’s lowest returns would have been after nine-year investment at $1.19 a slight drop from year eight profit of $1.20. Overall, Bitcoin’s returns from $1 are 116,213 times higher than Gold’s.
Our data also compared the investment period alongside the price of both Bitcoin and Gold. From, the data, despite fluctuations, Bitcoin’s price has been growing while Gold has remained fairly constant. Ten years ago, the Bitcoin value was $0.05200 while Gold stood at $1,199. Based on our calculations, Bitcoin’s highest price which was recorded a year ago at $9,793 represented a percentage difference of 149.15% compared to Gold’s $1,426. Gold’s lowest price was during after the five-year investment mark at $1,084 while Bitcoin stood at $289.3. Gold’s highest value was recorded nine years ago at $1,588 a percentage difference of 196.50% compared to Bitcoin’s $13.99.
Bitcoin beats expectations to remain profitable
For years, Bitcoin alongside other cryptocurrencies has been viewed as an alternative source of wealth. The debate has been elevated further thanks to the unlikely impact of the coronavirus pandemic where oil prices dropped and financial markets went into a crisis. This scenario led many to view Bitcoin as a “safe haven” that counters how equities perform.
Notably, while the traditional market was crashing, Bitcoin found its base after a short decline and recovered to stable levels. From the investment outcome, it is clear that Bitcoin has been profitable for investors who embarked on holding throughout the years of its existence. Anyone who has owned Bitcoin throughout its history is in profit. Notably, the increase in price has been sparked by the four-year halving process. Bitcoin’s halving historically attracts a lot of attention. While there were projections that the price would plunge mainly because of miner-induced selling pressure, BTC has so far defied them all. By press time the asset, had hit its five months all-time high by trading at $10,215.76
Will Bitcoin replace Gold?
Despite, the digital asset having an upper in terms of returns, replacing Gold is not a walk in the park. Gold has been around for decades than bitcoin. Over the years, Gold has remained lucrative while in the ten life span of Bitcoin, volatility has been a major issue. Gold’s value has been residing in an established history of commercial usage due to its anti-corrosive or conductive properties. For Bitcoin, the value resides in both the future value of online transactions conducted through its networks, but also in a sense of belief that eventually.
Furthermore, while Gold is a known commodity, classifying Bitcoin has been a debatable subject. Some parties argue that Bitcoin belongs to its asset class due to several variables such as the low correlation between bitcoin and other asset classes. Before marching Gold Bitcoin will need to overcome some of these uncertainties on its way.