How To Buy and Invest in Gold By Using Digital Gold, aka Bitcoin (BTC)


  • There are arguments that bitcoin is better than gold as it's portable and more convenient to manage.
  • However, organizations that back gold believe it is better than Bitcoin because they claim it has intrinsic value (whereas bitcoin doesn't).

Bitcoin Promoted As a Highly Portable, Divisible and Scarce Asset

There is an interesting relationship that exists between the ‘old guard' precious metal – Gold – and Bitcoin, the latter being commonly known as ‘digital gold‘. For one side, there is a pretty interesting divergence point with investors in both of these, some of which self-identify as political and economic libertarians who do not put much faith in the US Dollar.

Meanwhile, there are more Bitcoin / digital asset maximalists that push initiatives such as the #DropGold trend circulating on social media, as they seek to supplant and replace it with Bitcoin as a highly portable, divisible and scarce solution to precious metals.

But with these kinds of perspectives in mind, the following question comes up – Can Bitcoin and Gold Co-exist within the investing world? Or is this a Highlander situation – where the superiority of one means that the other is placed under dire threat?

Can Bitcoin and Gold Ever be Friends?

The climate between Bitcoin and Gold investors has been one less about amicable co-existence and more as a zero-sum contest between the two, with only one of them being allowed to prosper at the expense of the other. For investment companies like GrayScale Investments, they leave no uncertainty as to their perspective on this reality, especially with its ‘Drop Gold, Buy Bitcoin!' Campaign.

The company leaves us with the impression that this is a ‘nothing personal' kind of rivalry: “It's not that Gold is bad.” The company muses, “It's just that Bitcoin is better.” While this is a matter of some debate, especially when considering that Bitcoin's underlying utility as a store of value, akin to that of Gold is something this is hotly contested, within and outside of the cryptocurrency community.

Luckily enough, this is a viewpoint that is not as commonplace as GrayScale Investments would like to have you believe, and there's really no reason why any investor would need to nail their flag to the mast of strictly one of these assets. If anything, those that starkly refuse to pick a side can easily benefit from exposure to both in their portfolio.

Whether it comes from a belief that Bitcoin is the one better suited to being a store of value, or as a digital medium of exchange, or if you believe that Gold has been, and continues to be a strong investment haven away from sometimes volatile currencies, or as some kind of trusted alternative to the up and coming Bitcoin, it makes little difference. So long as you are of a logical mind enough to see that there is an intrinsic value in either of these, there are plenty of benefits to acquiring amounts of both, all without the need of getting your hands dirty with fiat in the meantime.

So what kind of alternatives are there to using Fiat as a middle ground between Bitcoin and Gold? One of them comes from the very well known stockbroker and self-professed libertarian Peter Schiff. It's through his own platform that people can invest in either Gold and/or silver by using either Bitcoin Cash or Bitcoin through Schiffgold.com, which can also take on physical delivery of it.

Investing in Gold and Bitcoin

One of the issues that come with investments in Silver and Gold is the matter of custody. While investors would have a choice between investing in and subsequently storing it themselves or finding a trusted third party storage solution, you don't necessarily have to do either of these. Especially with yield-bearing companies such as Kinesis, which has managed to initiate a debit card program within the UK and over the European Union referred to as Contis Group.

By making use of real stored assets of Gold and Silver, Kinesis uses these as a basis for its own digital currency, which has a 1 to 1 ratio of allocation with bullion, effectively making any gold that you have capable of being spent.

One of the other ways in which you can obtain gold for your investment portfolio without ever needing to store it yourself is through digital platforms like Currency.com, which allows for these kinds of assets to serve as tokenized commodities, which also includes spot gold, which is offered with leverage up to 100 times, with investors being able to exchange it for BTC or ETH.

Much like Bitcoin, Gold is more malleable than people think and can be held in many forms by its population of investors; such as being derivatives of gold, synthetic products, and even through third-party custodial companies over non-custodial companies.

An example of this is the Digix Gold Token (DGT). This digital asset is readily available and tradable on a range of accepted cryptocurrency exchanges, with each unit of it being reflective of one gram of gold.

For All The Rivalry – Bitcoin and Gold Have a lot in Common

If we take a look at this from a whole investment point of view, you're not exactly forced to ascribe to any kind of store of value theory for either Bitcoin or Gold, it's not exactly a compulsory thesis in order to see that both of them have some real value for long-term holding. There's one reason why both of these assets continue to attract investors of all kinds to add them to their investment portfolio. And that's because they each contribute positively to your portfolio's Sharpe Ratio.

If you were to invest in a range of assets that offer a low correlation to one another can actually improve the risk-adjusted return that you can make on your portfolio. It's important to mention as well that these assets, like any other, are not wholly immune to the economic downturn, but with that kind mind, both Gold and Bitcoin have shown a profound level of resilience in the face of negative events internationally.

This is one thing that each of these assets has in common, and it's why each of them appeals to a significantly broad, often libertarian audience – these assets can take many different shapes for different people. And, as a result, every single investor has their own unique reasons for looking to add Bitcoin or gold to their portfolio. Whether it's because you love either of these for their intrinsic / perceived value, you're drawn to them from purely aesthetic or political reasoning. If you have the means, it's far more worthwhile to bin the negatives against one of these assets and makes both long-term residents of your portfolio.

Do you have an opinion on either Bitcoin or Gold? Do you think it has to be one or the other, or can they actually complement one another? Share your thoughts on our social media feeds and comment section!

Bitcoin’s price is $44,043.13 BTC/USD exchange rate today. The real-time BTC market cap of $824.18 Billion currently ranks #1 with a chart dominance at 62.37%, daily trading volume of $29.93 Billion and live coin value change of BTC -1.97 in the last 24 hours.

Live Bitcoin (BTC) Price:

1 BTC/USD =$44,043.1346 change ~ -1.97%

Coin Market Cap

$824.18 Billion

24 Hour Volume

$29.93 Billion

24 Hour VWAP

$44.48 K

24 Hour Change

$-866.99

Get Daily Headlines

Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

What to Know More?

Join Our Telegram Group to Receive Live Updates on The Latest Blockchain & Crypto News From Your Favorite Projects

Join Our Telegram

Stay Up to Date!

Join us on Twitter to Get The Latest Trading Signals, Blockchain News, and Daily Communication with Crypto Users!

Join Our Twitter

Add comment

E-mail is already registered on the site. Please use the Login form or enter another.

You entered an incorrect username or password

Sorry, you must be logged in to post a comment.
Bitcoin Exchange Guide