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Many investors consider bitcoin to be even safer and more convenient than precious metals. Therefore, all billionaires and large companies are actively transferring capital to the cryptocurrency.
Why is Bitcoin better?
2020 started with bad news about a new infection. And in March, the entire world economy collapsed due to the coronavirus pandemic. Amid this situation, investors changed their attitude towards the cryptocurrency because it has not depreciated like many national currencies. Moreover, bitcoin quickly recovered from the March market crash.
As a result, bitcoin has become popular among investors on a par with gold. For example, the billionaire and founder of the hedge fund Tudor Investment Paul Tudor Jones invested 1% of his assets in bitcoin, which is about $50 million. The Canadian restaurant chain Tahini's also invested all its assets in the cryptocurrency.
Bitcoin VS gold
Analysts said Bitcoin is the digital equivalent of gold. One of the reasons for comparing these assets is their limited nature. Gold reserves are naturally limited, and bitcoin has a software code that makes it impossible to issue more than 21 million coins.
Experts argue that gold and bitcoin have a lot in common. Apart from the limited emission, these assets are difficult to counterfeit and easy to recognize. However, the cryptocurrency has a number of advantages.
Bitcoin is much more convenient to use as a means of payment. You can send bitcoin to the other hemisphere in just a couple of seconds, controlling the transaction. Besides, there is no need to spend money on storing bitcoins, while it is necessary to pay for a safe deposit box to store gold. Moreover, the cryptocurrency is difficult to steal. In addition, bitcoin is divisible. The cryptocurrency is easily shattered into pieces, which cannot be done with gold bars and high-value coins. The most important thing is that the state cannot freeze Bitcoin in a crisis situation, as it happens with gold.
Bitcoin VS US dollar
In 2020, the US dollar has become a weak thing. To support the US economy, the authorities began printing US dollars on an unprecedented basis, which is still ongoing. As a result of these measures, the money supply increased, and the American currency depreciated. Against this background, bitcoin only strengthened, because investors transferred their assets from USD to BTC as a defensive asset.
Bitcoin dominates the US dollar because it is independent from political and economic complexities. It will not be devalued like the US dollar. Experts are confident that bitcoin is a more reliable way of preserving assets today than the American dollar.
Analysts predict that bitcoin will surpass the $14,000 - 20,000 mark by the end of the year. And in five years, one coin will cost $100,000 in general.
Bitcoin VS shares
Also, after the collapse in the market, the leading shares indexes fell by 20-30%. The shares of many companies have become cheaper by several times and have not recovered until now.
Bitcoin also plunged from $10,000 to $3,800 in the spring, but its price immediately returned to growth. So, in May, its rate fully recovered, and in August it exceeded $12,000. This indicates the interest of investors in the cryptocurrency. It is possible that bitcoin will become a safe haven asset.
The growth of bitcoin was more active after the fall. The same cannot be said about the US stock market which has not yet reached the pre-crisis level. This indicates higher volatility of bitcoin.
The biggest advantage of bitcoin is that the cryptocurrency is protected from the risks of collapse. For example, when a company goes bankrupt, then all securities can collapse, as it happened with Wirecard. This won't happen with bitcoin for sure.
In addition, you do not need a broker to work with the cryptocurrency. Also, it does not depend on what is happening in the world.
Securities can get cheaper due to the slightest news, while bitcoin, on the contrary, only grows. It seems that bitcoin is becoming a popular asset among investors.
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