Bitcoin Competing with Gold, Not the Dollar
Jerome Powell, the Chair of the Federal Reserve, recently stated in an interview with CNBC that Bitcoin is in competition with gold rather than the U.S. dollar.
He compared Bitcoin to gold, emphasizing that people mainly use it as a speculative asset. Powell highlighted that Bitcoin is virtual and digital, similar to gold, and not widely used for transactions or as a stable store of value. Instead, he sees it as a rival to gold.
Bitcoin as a Store of Value
While Powell's remarks may have raised eyebrows, suggesting that Bitcoin is not utilized as a store of value, many individuals, including myself, view Bitcoin as a valuable asset for long-term investment and wealth preservation.
In my experience as an American, I prioritize accumulating Bitcoin as a store of value over competing with the U.S. dollar. When I do spend Bitcoin, I primarily use it for specific purchases, such as buying goods at the local market, while retaining my Bitcoin holdings for future growth.
Preference for Bitcoin over Gold
Personally, I find Bitcoin more appealing as a store of wealth compared to gold due to its liquidity and potential for long-term value appreciation. Unlike gold, which lacks utility in everyday transactions, Bitcoin offers greater utility and potential for growth over time.
Given the choice between holding gold or Bitcoin for value retention, I lean towards Bitcoin due to its superior performance and broader acceptance in the digital age.
Bitcoin's Superiority as a Store of Value
While Bitcoin's market capitalization is still lower than that of gold, I believe that Bitcoin's unique properties and increasing adoption will continue to position it as a superior store of value in the long run.
Despite Bitcoin not yet being a mainstream medium of exchange, its potential as a reliable store of value makes it a compelling option for individuals seeking to preserve and grow their wealth.
This article is a Take. Opinions expressed are solely those of the author and do not necessarily represent BTC Inc or Bitcoin Magazine.
Frequently Asked Questions
What is the best precious metal to invest in?
Answering this question will depend on your willingness to take some risk and the return you seek. Gold is a traditional haven investment. However, it is not always the most profitable. If you are looking for quick profits, gold might not be the right investment. You should invest in silver if you have the patience and time.
If you don't care about getting rich quickly, gold is probably the way to go. If you are looking for a long-term investment that will provide steady returns, silver may be a better choice.
What precious metals could you invest in to retire?
Silver and gold are two of the most valuable precious metals. Both are easy to sell and can be bought easily. Consider adding them to the list if you're looking to diversify and expand your portfolio.
Gold: This is the oldest form of currency that man has ever known. It is also extremely safe and stable. This makes it a good option to preserve wealth in uncertain times.
Silver: Silver has always been popular among investors. It's a great option for those who want stability. Silver, unlike gold, tends not to go down but up.
Platinum: This precious metal is also becoming more popular. It's resistant to corrosion and durable, similar to gold and silver. It's also more expensive than the other two.
Rhodium: Rhodium can be used in catalytic convertors. It is also used as a jewelry material. It is also very affordable in comparison to other types.
Palladium: Palladium has a similarity to platinum but is more rare. It's also more affordable. This is why it has become a favourite among investors looking for precious metals.
What is the best way to hold physical gold?
Not only is gold paper currency, but it's also money. It's an asset that people have used for thousands of years as a store of value, a way to keep wealth safe from inflation and economic uncertainty. Gold is a part of a diversified portfolio that investors can use to protect their wealth from financial uncertainty.
Many Americans are now more inclined to invest in precious metals like gold and silver than stocks or bonds. Although owning gold does not guarantee that you will make money investing in it, there are many reasons to consider adding gold into your retirement portfolio.
Gold has historically performed better during financial panics than other assets. Gold prices rose nearly 100 percent between August 2011 and early 2013, while the S&P 500 fell 21 percent over the same period. Gold was one of the few assets that performed better than stocks during turbulent market conditions.
Gold is one of the few assets that has virtually no counterparty risks. If your stock portfolio goes down, you still own your shares. You can still own your gold even if the company where you invested fails to pay its debt.
Gold provides liquidity. This allows you to sell your gold whenever you want, unlike many other investments. You can buy gold in small amounts because it is so liquid. This allows for you to benefit from the short-term fluctuations of the gold market.
Statistics
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
External Links
cftc.gov
law.cornell.edu
- 7 U.S. Code SS7 – Designation board of trade as contract marketplaces
- 26 U.S. Code SS 408 – Individual retirement accounts
wsj.com
- Saddam Hussein's Invasion Helped Uncage a Bear In 1990 – WSJ
- How do you keep your IRA Gold at Home? It's Not Exactly Lawful – WSJ
forbes.com
- Gold IRA: Add Some Sparkle To Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
How To
How to Hold Physical Gold in an IRA
The best way of investing in gold is to purchase shares from companies that produce gold. But, this approach comes with risks. These companies may not survive the next few years. Even if they survive, there's always the risk that they will lose money due fluctuations in gold prices.
Another option is to purchase physical gold. This means that you will need to open an account at a bank, bullion seller online, or purchase gold from a trusted seller. These options offer the convenience of easy access, as you don't need stock exchanges to do so. You can also make purchases at lower prices. It is also easier to check how much gold you have stored. You will receive a receipt detailing exactly what you paid. There's also less chance of theft than investing in stocks.
There are also some drawbacks. You won't get the bank's interest rates or investment money. Also, you won't be able to diversify your holdings – you're stuck with whatever you bought. Finally, tax man may want to ask where you put your gold.
BullionVault.com is the best website to learn about gold purchases in an IRA.
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By: Nikolaus Hoffman
Title: Bitcoin vs. Gold: A Store of Value Battle
Sourced From: bitcoinmagazine.com/markets/fed-chair-jerome-powell-is-correct-bitcoin-is-in-competition-with-gold-not-the-dollar
Published Date: Wed, 04 Dec 2024 21:37:40 GMT
