Buy gold or Bitcoin? Gold is better for wealth than crypto

column

Daniel Saurenz
Gold is better for wealth creation than crypto

Even though, as is well known, settlement only takes place at the end, the stock market year 2024 will have made many investors very happy. With indices such as Dax, S&P 500 and Nasdaq 100, returns well above average were possible. Aside from the stock markets, things also went up steeply: The Bitcoin is up around 120 percent and is absolutely safe, making rather boring havens like gold shine like rarely in recent years. According to evaluations by the gold dealer Ophirum, gold delivered a return of almost 28 percent. “The yellow precious metal even beats the S&P 500 and is well on its way to surpassing even the strong annual result of 30 percent from 2007,” said the experts from the Lynx broker. In addition, the chances of success in the remaining weeks are good, as a look at the statistics shows.

Depot check
An investor followed the advice of her bank advisor – this is what happened

November 28, 2024

An investor invested for years based on the recommendations of her bank advisor. They then had their portfolio examined during the capital portfolio check. The result amazed her

Russia and China buy gold instead of US government bonds

The focus is on Trump’s economic policy. In order to finance the announced massive tax cuts, new national debt is necessary. It is therefore dependent on relatively low interest rates and therefore a loose monetary policy from the US Federal Reserve. However, this is only possible if inflation does not increase again and the monetary authorities are given appropriate leeway. Trump is therefore likely to quickly put pressure on Fed Chairman Jerome Powell to further cut interest rates. The Fed will probably ease further, but not as much as currently expected. The interesting question will therefore be who will buy US government bonds. Countries such as China, Russia and Turkey have been increasingly turning to gold for some time and are avoiding US bonds.

For good reason, as geopolitical tensions and trade conflicts continue to increase. In addition, gold as a tangible asset always guarantees a certain value in contrast to crypto assets. This is one of the reasons why the precious metal is considered a classic safe haven alongside bonds and currencies such as the Swiss franc. Bitcoin has put in an impressive performance in the past few months and is likely to be even more celebrated in the media when it breaks the $100,000 barrier. However, investors should not forget that return and risk are always proportional to one another.

Bitcoin: Price fluctuates greatly

Although gold is often described as a safe haven, it has also shown longer correction phases in the past. The troy ounce lost a good 40 percent between 2011 and 2016. “Bitcoin instead plays in a different risk league,” says expert Molnar. Although the digital coin shows very strong rally phases, every hype was also followed by a crypto winter. Daily movements of ten percent and painful corrections are not uncommon. Since 2010, the price has fallen by 80 to 90 percent from its record high four times.

Anyone who exchanges gold for Bitcoins also takes a lot of risk. Cryptos are used for speculation, gold is used for long-term wealth creation and stability in the portfolio. In addition to bonds and safe haven currencies, the precious metal remains a safe haven that is needed, like protection on the stock market, especially when things become more turbulent again. And the year 2025 is likely to have some surprises in store.