investing in gold Archives

Bitcoin as an investment?

It’s natural for economists to give gold a better score when comparing Bitcoin versus Gold for investment purposes. Gold has been studied, traded and invested in for over a thousands of years. It has been an integral part of human civilization for a long time and has an undeniable track record that can be traced to the earliest civilizations on earth.

So it makes sense that a majority of economists (Paul Krugman included) have more faith in the precious metal than the relatively new digital currency.

However, for the believers, one reason that pushes them towards the credibility of bitcoin versus gold as an investment is that it is only about five years old. and, it is already competing with gold.

But, the golden question here is.

Are there similarities between gold and bitcoin?

After all, bitcoin has taken the world by storm and there is speculation that it will soon surpass gold in terms of popularity. Here are a few attributes that are inherent in both bitcoin and gold

Looking at the Bitcoin versus Gold Price Movement

Limited Availability of the two assets

Gold’s cultural value and importance comes from its scarcity. Gold is available in limited quantities to meet its demand. It is estimated that in the entire history of man kind only 171,300 tonnes of gold have been extracted.

The story is similar for bitcoins. There will only ever be a limited quantity of 21 million bitcoins in circulation, which is probably going to be reached far off into the future, the majority opinion is 2141.

Those are just a few of the reasons why people think both gold and bitcoins are precious when analyzing Bitcoin versus Gold.

No Backing

Bitcoin and gold are backed by no one. While there are real market values for both, they are neither controlled nor governed by any central agency. This makes the prices of both adjust according to demands in a transparent manner.

Both have value due to the reason that society has faith that they will keep said value over time. Some say gold has industrial use, but the majority of gold is purchased for investment. Don’t forget, both gold and bitcoin are open source.

No Intrinsic Value

Both gold and bitcoin have no intrinsic value in my opinion. They are of no use if, say, an apocalypse arrives. They have demand but are not something which can be used to meet our basic needs like food and water.

Sure, you can use gold to get money but it is again due to the fact that society has faith in it. In many places the situation for bitcoin is the same.

When it comes to Bitcoin versus Gold

Bitcoin is built with the ubiquitous internet revolution in mind. It has some ideal attributes of the online world: decentralization, transparency, cryptography and is peer to peer. Gold has none of this and it is really heavy to move.

As a contemporary payment system, bitcoin could be used globally with security and speed.

John Browne from Euro Pacific Capital opines:

“the advent of crypto-currencies represents the increasing popular demand for a currency insulated from political debasement and bank profiteering. Crypto-currencies represent a legitimate attempt by private citizens to reassert their sovereignty over such government actions.”

No matter what the economists say about bitcoin, these attributes give bitcoin a healthy advantage.

Most people are passive and incurious in their strategy for setting up a self-directed IRA. They most frequently take the path of least resistance, and go with a self-directed IRA in stocks, bonds or mutual funds. This is probably because they’re not aware they have other options – quite a few other options, actually.

In a self-directed IRA, you can invest in commercial rental properties, precious metals, oil and gas organizations, tax lien certificates and even private placements. One of the keys to choosing a solid and allowable alternative investment in your self-directed IRA is to work through a reputable custodian. As the Security and Exchange Commission (SEC) clearly states through its Office of Investor Education and Advocacy:

“Most IRA custodians are banks and broker-dealers that limit the holdings in IRA accounts to firm-approved stocks, bonds, mutual funds and CDs. Custodians and trustees for self-directed IRAs, however, may allow investors to invest retirement funds in other types of assets …”

Given this allowable path to an alternative investment, we highly suggest you consider an investment in bitcoin for your self-directed IRA.

Bitcoin is digital currency that originates and is sustained electronically. Unlike dollars or other fiat currency, bitcoin is not printed or controlled by any government. There is no intermediary between payer and payee. As such, bitcoin is frequently characterized as a “peer-to-peer currency.”

Bitcoin has virtues traditional money can’t compete with. You can set up a bitcoin account in no time. With a traditional bank account, you sometimes have to wait days for a new account to be approved.
Also, with bitcoin, you can send money internationally in seconds and not have to wait for approval. Remember, large banks don’t control bitcoin. Details of every bitcoin transaction are stored in a general ledger called a blockchain. But since it’s not possible to get to the person responsible for a bitcoin transaction by knowing a bitcoin address, all bitcoins transactions are anonymous.

Bitcoin reputation for quick anonymous money has definitely caught on. Businesses like Dell, Target, Amazon, Victoria’s Secret, Paypal, and many others all accept bitcoin.

Because of its volatility and possibility for very wide use, bitcoin offers solid opportunity for upside potential. It’s for these reasons, we suggest you consider a self-directed bitcoin IRA as a long-term investment.
This kind of investment is not for everyone. You have to be an accredited investor to participate. In other words, you need a net worth of a million dollars, not counting the value of your primary residence. Or you need to have an income of $200,000 dollars in each of the last two years (or $300,000 with a spouse).
You can have an IRA consisting exclusively of bitcoin, or as part of a mixed portfolio with other assets; but, in either case, your IRA must be self-directed. And to have a self-directed IRA, you’ll need a custodian. There are only a few custodians who handle bitcoin.

If you want to set up a bitcoin self-directed IRA, call BitcoinIRA at 1-800-717-1130. One of our representatives will help you initiate your account through a reputable and knowledgeable custodian.

Tag: investing in gold

Bitcoin Versus Gold