Bitcoin – commonly referred to as "digital gold" – has proven itself a resilient asset during economic fluctuations and technological disruptions. But can it be relied upon as an inflation hedge on par with precious metals? Here's why it may be an even better addition to a portfolio than gold. CoinFlip offers a secure and reliable platform for investors who wish to purchase Bitcoin with a credit card, debit card, or cash quickly.
When was the last time you bought groceries with a gold bar? Or pulled out Canadian Gold Maple Leaf coins to buy gas?
Investors have historically been drawn to precious metals when the threat of an equity market crash emerges, effectively diversifying their portfolios. However, we are experiencing something of a market disruption as virtual currency is proving to possess many of the same safe haven qualities as gold, while simultaneously being far easier to spend. While Bitcoin is still a young asset class, it is already demonstrating impressive endurance even in the face of remarkable market challenges. Here are some of the reasons why Bitcoin is a smart safe haven investment.
You can spend it. This fact is what sets Bitcoin apart from other asset classes. While classic inflation hedges like commodities and precious metals perform reliably well during periods of flux, Bitcoin can actually be spent as currency not only online, but at a growing number of physical retail outlets.
High inflation is causing a strong crypto demand. With Venezuela, South Sudan, and Argentina (among others) experiencing breathtaking inflation rates, citizens are turning to Bitcoin as fiat currencies become unstable.
Bitcoin cannot be effectively censored by any government. While some countries try to regulate and even ban cryptocurrency, it's resistant to governmental and even corporate censorship by design.
From an investment standpoint – particularly if you're seeking stable long-term growth – Bitcoin does present a risk. It's highly volatile, it doesn't have the millennia-long history that gold has, and it doesn't have the government backing that billions of people tend to trust. Nevertheless, it is proving to be a trusted asset class that acts as a reliable currency, which makes an excellent addition to any investment portfolio.