What Returns Show And What Experts Say

Last year around this time, a comparison between Bitcoin and gold surfaced, with the former outperforming the yellow metal for a few years in a row. But this year, gold’s return has exceeded Bitcoin without a doubt, according to data from Augmont Enterprises Private Limited, a gold trading company.

Among other factors, some experts consider both assets to be a store of value. Amanjot Malhotra, country director of Bitay, a global fintech company focused on crypto assets, blockchain, artificial intelligence, IoT, etc., said that one of the most common reasons for buying both gold and Bitcoin is that they are a store of value during the economy. uncertainties

Gold Vs Bitcoin: General Returns

Weather Bitcoin jumped almost 1,300 percent in 2017-18, gold returned around 6.3-7.3 percent. In 2019-20, 2020-21 and 2021-22 as well, Bitcoin earned significantly more than gold (see table). Year to date, however, Bitcoin is down nearly 57 percent against gold’s more than 4 percent positive return.

Gold demand was healthy this holiday season. The India Bullion and Jewelers Association (IBJA) estimates that some 39 tons of gold, worth Rs 19.5 billion, were sold during the two-day festival.

Table showing the performance of gold and Bitcoin (BTC) over several years Sources: Crebaco Gold and Augmont Enterprises Private Limited

What the experts say

Unlike the gold industry, the cryptocurrency market lacks stability. “(Gold) has been there with us for a long time; it is among the most liquid forms of assets and investments and has always given positive returns over long periods,” says Aditya Modak, co-founder of Gargi by PN Gadgil & Sons, a jewelry group.

Additionally, digital assets carry high risk due to volatility, experts say. “Investors have already seen it (Bitcoin) skyrocketing and falling to record lows in no time. So seeing this, conservative investors are leaning towards traditional low-risk assets,” says Nidhi Manchanda, Certified Financial Planner and Head of Training, Research and Development at Fintoo.

But Bitcoin supporters believe that its fundamentals are positive, although they are disconnected from its current price. “Looking at some metrics like the Bitcoin network hash rate, Bitcoin adoption, and Lightning Network adoption, it is clear that most of the fundamentals of Bitcoin are on an upward trajectory,” says Mohammed Roshan, CEO and co-founder of GoSats. a Bitcoin rewards app.

They also believe that the crypto winter is short term. “I don’t expect the price to remain deflated in the long run. We also shouldn’t forget that compared to other assets, the Bitcoin market is nascent and currently affected by macroeconomic headwinds,” says Roshan.

Malhotra says that Bitcoin has never taken more than three or four years to recover its price. “This suggests that in the long run, BTC could be a store of value,” he says.