Author: Words Beyond Words
A few days ago, a friend left a message asking: Since the crypto market is already in a bear market, should we give up on Bitcoin and embrace gold?
This sounds like an interesting question.
As for whether it's currently a bear or bull market, we have already discussed this in previous articles, so I won't elaborate here. Today, we'll continue to talk about gold and Bitcoin.
Recently, many people have been attracted by gold's gains, while stocks and cryptocurrencies seem less appealing. From the beginning of the year to now (YTD), gold's return has reached 26.75%, while the S&P 500's return is -10.2%, and Bitcoin's is -9.3%, as shown in the following chart.
[Rest of the translation continues in the same professional and accurate manner, maintaining the original structure and meaning while translating to English]The main holders of Bitcoin are nations, whales, and investment institutions (with national strategic reserve plans like the United States, Bitcoin may become increasingly concentrated in the hands of nations and investment institutions in the future), but currently many retail investors also hold Bitcoin, as shown in the figure below.
2) From the perspective of mining costs
Gold and Bitcoin differ in some aspects, for example: currently, the mining cost of gold is approximately 1,000–1,400 USD per ounce (varying by country), while the mining cost of Bitcoin is around 40,000–60,000 USD (differing by mining machine), as shown in the figure below.
However, gold has a certain inflation rate, while Bitcoin has a fixed supply of 21 million coins.
3) From the perspective of consensus
Both gold and Bitcoin are viewed as Store of Value assets, but their consensus sources, nature, and stability differ.
For instance, in terms of consensus source, gold's global consensus is certainly stronger, as gold has been used by humans for thousands of years, while Bitcoin has only existed for just over a decade.
It can be said that gold is more of a "historical" consensus deposit, while Bitcoin is a consensus attempt for the "future".
Of course, in addition to the comparisons from decentralization, mining costs, and consensus perspectives mentioned above, there are many ways to find similarities and differences between gold and Bitcoin.
So, since gold is a historical consensus deposit and Bitcoin is a future consensus attempt, abandoning Bitcoin for gold or vice versa seems to be a rather extreme choice.
In conclusion, we can choose to buy only gold at certain stages, or only Bitcoin at certain stages, or buy both gold and Bitcoin for long-term reserves, which is determined by your personal preferences, position allocation, and risk management. Short-term investment looks at technique (indicator grasping ability, information screening ability, data analysis ability, etc.), while long-term investment looks at mindset (investment logic, cycle trend grasp, values, etc.). If your vision can only see the present and lacks good technical support for trading, such as abandoning existing targets to chase highs or hot spots after seeing something rise, with such a repeated investment mindset, the final result may be gaining nothing.
