During the last few weeks, gold has skyrocketed in value over the concerns fueled by the faltering global economy. Despite the fact that gold has always been a safe-haven, many investors are looking to bitcoin because they fear central banks will dilute the market or even confiscate the gold.
Prior to Covid-19, central banks purchased massive amounts of gold and alongside this, a number of countries are having serious issues repatriating their gold reserves. This has caused investors worldwide to question gold over crypto assets.
There’s no doubt that gold has been on a tear, but many people have concerns about the precious metal being a solid safe-haven due to a number of factors. In recent years, investors have found cryptocurrencies like bitcoin (BTC) have a number of benefits that gold cannot offer.
At the time of publication, one troy ounce of .999 fine gold is trading for $1,963 and many investors believe the price is headed higher. But some of the biggest issues with gold, in comparison to crypto assets, is the problem with storage.
A few hundred thousand dollars worth of gold held by a single individual isn’t not as easy as say storing $300,000 worth of BTC. An individual has to secure the precious metal by hiding it and leveraging a safe, and oftentimes people with that much gold have a third-party store it for them.
Safes and added custodial security create extra costs to investing in gold and storing the metal with a third party means you have to trust them. The gold custodian could get robbed or a government entity could seize the metal leaving all the investors high and dry.
Moreover, governments have been known to seize peoples gold.
