Welcome to another lesson from the Crypto Classroom where we hope to answer this question: is Bitcoin the best asset class EVER? I am sure by now you have probably heard of Bitcoin (BTC) unless you have been living under a rock for the past 10 years. Check out our article on Bitcoin so that you are not clueless when reading this article! Anyways, recently, Bitcoin has made another monumental stride as it broke through the $10,000 USD boundary. At the time of writing, Bitcoin is currently valued at $11,800. The currency is looking promising and hoping to tread even higher! Enough of Bitcoin’s current performance, let’s dive into how Bitcoin compares to other investments and other assets.
Bitcoin (BTC) to USD:
So, I am sure that many of you are now wondering: “how does Bitcoin compare to the almighty USD”? Great question, let’s look at some graphs so that you can better understand the comparison of Bitcoin to USD.
From the graph above, you can see the strength of Bitcoin when compared to the USD. Bitcoin is worth exponentially more than the USD. More importantly, however, what this graph helps to show is that the USD is nothing but a “piece of paper” that is assigned with a value, whereas Bitcoin actually has a use case and true value!
Now let’s take a closer look at how Bitcoin has compared to the USD in the last 5 years. Even in just the past 5 years alone.
We can see that the USD is trending downwards massively when compared to Bitcoin.
So, this just further asserts the strength of Bitcoin and shows why cryptocurrencies are truly the future.
What is the Best Store of Value?
Having seen the above, let’s look at the different fiat currencies and their money supply growth in comparison to Bitcoin. As many of you may know, Bitcoin has a fixed supply of 21 million. Other currencies like the USD, Japanese Yen, Brazilian Real, etc can have unlimited supply since it can just be printed. Hence, in the graph above you can see that the money supply growth of fiat currencies going up to 1000% and this is directly linked to long-term price inflation. This would mean that if you continue to hold your fiat currencies, the value of it will continue to fall, whereas if you held Bitcoin you could actually maintain or even increase your wealth. Say goodbye to fiat currencies!
Bitcoin (BTC) to Gold
Another hot topic that we need to discuss is physical gold in comparison to Bitcoin, digital gold. Gold has been widely used in the past, however, ever since the 1970s it has lost its use case as governments released themselves from the financial responsibilities that gold imposed. Gold and Bitcoin are both alternatives for people who do not trust the financial systems. This is also the reason why many holders of gold are so quick to jump on the Bitcoin bandwagon.
As many of you may know, gold and Bitcoin are quite similar. Both assets are decentralized, deflationary, anonymous, and can’t be affected by hyperinflation. Check out our article on Bitcoin and Gold to learn more! However, despite their similarities, gold and Bitcoin still have quite a lot of differences. Gold is a natural resource, whereas Bitcoin is a digital currency that is part of a network known as the Blockchain. Moreover, gold is a better means for preserving wealth, as Bitcoin is a better exchange for other currencies and serves as a better investment. So, that boils down to the question: how does Bitcoin compare to gold? Let’s take a look at the graph below!
As you can see from the graph, Bitcoin is doing comparably well when compared to gold. The value of Bitcoin to gold has always been on a growth trend ever since its initial introduction back in 2009. So, it is easy to suggest that Bitcoin is a better investment than gold.
Bitcoin to Other Assets:
Having talked about Bitcoin in comparison to the two biggest assets, gold and USD; let’s talk a little about how Bitcoin compares to all other assets.
By just simply looking at this graphic above, we can see that Bitcoin is one of the FEW asset classes that is still coming in with a positive return amidst COVID-19. Check out the below chart to see Bitcoin’s most updated YTD.
WOW! 52.88% YTD for Bitcoin, you’re probably wondering how that’s even possible especially given what is going on currently in the world. If you take a look at the Dow Jones, S&P 500, and Hang Seng Index, all these exchanges are posting negative YTD. The only asset that even comes close to Bitcoin is the US Treasuries for (20+ years) and that is only half of Bitcoin’s YTD. And come on, let’s be honest when you give your money to the government for 20+ years, are you really ready to wait 20+ years for a yield? That’s close to a fourth of your life! Even when we compare Bitcoin to the stable asset, gold, the currency still manages to outperform it. There’s no question that Bitcoin is the best asset EVER.
Conclusion
I am sure that many of you reading this will still be quite skeptical when it comes to investing in Bitcoin. So be sure to do your own research before investing! Bitcoin will reach the moon with or without you. So make sure you don’t lose out on this golden opportunity before it is too late!
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Resources:
https://micky.com.au/bitcoin-btc-remains-the-best-performing-asset-class-in-2020/#:~:text=New%20research%20by%20New%20York,terms%20of%20performance%20and%20returns
https://cointelegraph.com/news/bitcoin-is-outperforming-every-mainstream-asset-class-in-2020
https://www.coindesk.com/cryptocurrency-is-still-the-worlds-best-performing-asset-class-this-year
https://www.buybitcoinworldwide.com/bitcoin-price-in-gold/
