Bitcoin or Gold: Which Is the Better Buy?
The Bitcoin-(CRYPTO: BTC)-versus-gold debate is heating up again after Wall Street investment bank Goldman Sachs (NYSE: GS) released a new research note documenting all the reasons it views gold as a better investment than Bitcoin. With Bitcoin down about 64% for the year, it's easy to see why Goldman Sachs has soured on the cryptocurrency.
As Goldman Sachs argues, there is simply too much speculation and volatility surrounding Bitcoin. On top of that, the original cryptocurrency has failed to deliver on several of the key promises that were supposed to underpin its value proposition -- such as the idea that it would act as a hedge against inflation or extreme market volatility. Although some of Bitcoin's weaknesses have certainly been exposed this year, the question is still worth asking: Is gold really a better long-term investment than Bitcoin?
Right now, says Goldman Sachs, Bitcoin is basically trading like a high-risk, high-growth tech company stock. During bull markets, those companies can be fantastic investments based on the market-beating returns they can generate. However, during bear markets, investors typically seek out less risky assets such as blue-chip stocks and gold. So, as long as inflation concerns and recession fears hover over the economy, Goldman Sachs thinks gold is a safer place to put your money.
Source Fool.com
