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Gold vs. Bitcoin – Which Commodity Will Matter More For The Next Decade?

Gold vs Bitcoin. Image: Unsplash.

In late 2020, we took a stab at previewing which stocks we’d be talking about most throughout the 2020s.

It hasn’t been too long since then, but already the predictions look quite sound.

Companies like Tesla, Apple, Tencent, and Huawei hold massive sway and are unlikely to slow down anytime soon.

In fact, each of them has known plans for the future that are virtually assured to keep them at the top of our newsfeeds (and our stock charts).

What options do we have?

An oil rig. Image: Flickr.

Since many investors like to diversify beyond stock markets, however, we also want to look ahead to what commodities will be most influential over the course of the decade.

In this case, though, we’re not looking so much to draw a few options out of a crowded category. Rather, we’re exploring an emerging tug-of-war between two commodities likely to command the most popular attention: gold and bitcoin.

Once upon a time, it would have been necessary to include oil in this conversation as well, given that it is the most traded commodity. But given the oil demand crisis that appears poised to linger long after the worst of the COVID-19 pandemic, the future would appear to belong to gold and bitcoin.

The question is which one will matter more between now and 2030.

Gold

Gold. Image: Flickr.

The main point in favor of gold is likely to be that it is established, and to some extent stable and predictable.

That doesn’t mean investors can work out foolproof plans to profit off of the precious metal, but it does mean gold is unlikely to produce much surprise.

Both the value of gold and the factors that influence that value have been well understood for a very long time, which is ultimately one of the main reasons it’s such a popular option for investors.

The same cannot be said of bitcoin, and that alone is reason to trust that gold will remain more relevant for the next 10 years at least.

Another point that could give gold an advantage is that it provides investors with more ways to trade.

The most popular option is to buy and sell bullion through online brokers, without ever actually handling the metal.

However, top-performing gold ETFs also give investors the option of investing in gold in a manner similar to stock market trading. Basically, it means buying into a fund that follows the performance of gold-related assets.

And even beyond this, some investors ultimately opt to collect and sell gold physically or trade directly in mining company stock.

This variety of options broadens the gold market’s appeal, while bitcoin is still somewhat limited in this respect (though there are some early attempts at bitcoin ETFs and futures trading).

Bitcoin

Bitcoin. Image: Flickr.

Where bitcoin is concerned, the main advantage is that it is still quite new in the grand scheme of things.

No one can predict with certainty what will happen with cryptocurrency in the next 10 years, but that lack of certainty actually amounts to the potential that excites investors.

Novelty certainly makes some nervous, but it also makes an asset intriguing.

And already we can see that a lot of people who wouldn’t otherwise be interested in commodity trading at all are getting into the bitcoin market.

This alone should keep bitcoin extremely relevant for years to come.

Additionally, there’s the pure potential of bitcoin to consider.

Because of its novelty, we have no way of knowing how close to its maximum value it has gotten just yet.

And some bitcoin predictions are extraordinarily lofty, speculating that a single coin could be worth $100 million by 2030.

We should stress that there are just as many predictions that bitcoin will go bust and eventually lose much of its value.

But as long as there’s a possibility of significant gains, bitcoin will be of great interest to a great many people.

Conclusion

Ultimately we can’t necessarily pick one commodity or the other as the most relevant one of the decades to come.

What’s clear though is that gold and bitcoin are both in influential positions, and will appeal to investors for different reasons.

Those who seek out commodities to diversify portfolios or maintain havens against currency fluctuation will continue to value gold.

Those speculating and hoping to see growth opportunities may keep a closer eye on bitcoin.

But neither asset is going anywhere anytime soon.

References and Credits

1. Featured images in this article are used under creative commons licenses and sourced from the following websites: Pascal Maramis, ElMelindo and Jorge Franganillo.

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