To say that millions of Americans have lost trust and now fear the outcome of the government’s loose spending over the past twelve months would be an understatement.
Paired with small business “force” downs, high unemployment numbers, and a new office that seems dedicated to driving us further into debt- the majority of the population has been scrambling to find any new asset to use as a safe haven.
And when we say “any,” we mean any.
Today, one asset in question is Bitcoin.
To start, and we’re sure you’ve heard similar stories, is Bitcoin’s highly volatile nature.
For example, on the first weekend of 2021, Bitcoin rose 20%. The next Sunday, it fell 20%.
While these price swings may be appealing to those who glue themselves to their computer screen for 20 hours a day, hoping that they could become a millionaire by the morning, it may not be realistic for others.
In other words, easy come, easy go.
In this respect, Bitcoin acts as the exact opposite of gold when it comes to being risk-averse, or at least one that doesn’t experience much volatility compared to its counterpart.
Of course, every asset experiences its highs and lows, but for one: gold is truly the gold standard when all else fails, as it tends to hold intrinsic value.
At this point, Bitcoin’s instability seems more like flipping a coin than protecting your wealth.
Even for those who could expect the worst such as a nuclear fallout to occur, Bitcoin relies on technology, whose value may be whatever the markets say it is.
Gold has been used for centuries as a store of wealth and is recognized around the world. It does not rely on computers and it offers instant liquidity.
Today, gold and other precious metals can be converted and sold into cash.
We’re not saying that we would never take Bitcoin seriously, but with a short 12-year track record compared to gold, it’s hard for us to jump on the hype train.
The past year has undoubtedly been a rollercoaster ride of emotions from many aspects.
However, emotions and investing do not mix, or at least not well.
And that’s what we see going on now in the Bitcoin market- too many emotions and little to no logic being used.
If we wanted to risk all of our hard-earned money, which took us decades to acquire, then speculative trading would be our specialty.