Founded as a hedge fund firm in 2015, Marto attracted investors across the globe. While writing her research papers, Katina Stefanova and the research team highlighted the importance of bitcoin in a new era of digital currencies. Bitcoin has compelled large global entities to think about using the international digital currency for investing. Bitcoin is currently trading at the top of the cryptocurrencies list. Bitcoin, a digital currency, uses protocols and cryptographic algorithms to determine the security of transactions. Bitcoin is the first transfer and transaction system that uses nodes and does not use third party processing and confirmation of transactions.
The research team has compared gold and bitcoin as haven options. The price of gold will outperform both equities and bonds, consequently, bitcoin has achieved widespread recognition in the last few years. Katina Stefanova recommended BTC and Gold to investors to get involved with investing purposes.
What comparisons Marto Capital investors found about Gold and BTC
Marto analyzed that both Gold and BTC provide transparency, safety, and legality to the investors. When traders used gold for trading, they found it hard to corrupt the metal. Bitcoin is also difficult to corrupt. Both gold and bitcoin are rare resources. Historically, gold has been used in many applications, from luxury items like jewelry to specialized applications in dentistry, electronics, and more. Bitcoin is like “digital gold”, but it cannot be used in the same way as traditional currency for at least the next five years.
Stefanova and other investment professionals found that when both gold and Bitcoin are mined, their virtual applications demonstrate them as safe-haven assets. The investors think they can complement both gold and bitcoin in a portfolio. Gold has better applications in some cases and Bitcoin in others. Bitcoin is more transportable and divisible, and more applicable as a currency. But gold is more stable, with a proven track record. Both offer virtually no correlation to traditional asset classes, with gold’s correlation at 0. So Bitcoin is currently characterized as a speculative asset. For investors, Bitcoin has become a store of value, they converted small portions of their gold positions to Bitcoin as a hedge and diversifier.
The comparison between Gold and Bitcoin expound that both have different long-term U.S. tax rates on investments bought and sold. Bitcoin is taxed in the same way as stock ownership, with a long-term capital-gains rate of 0-20%, depending on income level. Bitcoin is already a store of value within the world of cryptocurrencies and can be embraced on a wider scale. While Gold also has a store of value, the amount available on Earth is finite and the mining rate has been relatively stable.
Furthermore, the investors found Bitcoin superior to gold as a medium of exchange. Unlike gold, Bitcoin is a fixed unit of account and is easily divisible and transportable. Gold isn’t easily divisible on the spot, and there are potential issues with purity and verification. Digital currencies are starting to be accepted as a form of payment with vendors and retailers. Therefore, digital currencies such as Bitcoin have been accepted as a form of payment with retailers for investing and trading of different goods and services.
Bitcoin or Gold, which is better for investment
Why Invest in Gold?
Stefanova, CIO of Marto Capital, took the contrarian view and recommended BTC and Gold to investors. According to her research analysis, people value gold because it’s a source of security that has been tested over time. Gold is better understood as a haven that investors embrace when times get soupy. While Bitcoin hasn’t been around during a major financial crisis like the Great Recession. Gold is a well-regarded asset, widely used by investment professionals. Central banks, major governmental institutions, pension funds have an allocation to gold. Moreover, people considered gold as insurance for their money as it benefits in times of crisis.
According to investors, there are several ways to purchase gold. Investors have the option of buying physical gold bullion or gold coins, which usually have a higher barrier of entry, or you can purchase gold equities or exchange-traded funds.
However, there are some disadvantages of keeping gold for investment. Gold does not provide any sort of recurring income compared to other asset classes like real estate (income from rental properties) or stocks (income from dividends). Moreover, the costs of storing large quantities of the precious metal can be quite high, low liquidity creates large spreads and, in some cases, it can be hard to verify the purity and legitimacy of the gold.
Why Invest in Bitcoin?
Bitcoin is an electronic payment system that exists beyond the control of any central government. While people have been using gold as a medium of exchange for 5,000-year, bitcoin has come up as a digital model of investment globally. Bitcoin is the world’s largest cryptocurrency by market capitalization. Unlike the stock market, which is open for trading during the week, the cryptocurrency markets allow users to trade Bitcoin and other digital assets 24 hours a day, seven days a week. Bitcoin has been a tremendous speculative asset and its long-term correlation to other portfolio assets determine it a revolutionary technology of changing the ways of investment and trading. Blockchain acts as an intermediary of monetary exchange between individuals, eliminating the middleman like banks and other financial institutions and empowering a decentralized market.
Like gold and other precious metals, Bitcoin derives its value from its growing consumer demand. However, it is observed that since cryptocurrency is an emerging asset class, the investors who wish to invest in this new asset feel skeptical as Bitcoin has a short time in the market. Gold has a longer performance track than Bitcoin.
Ultimately, the investors feel that as they are moving toward a cashless and digital society, using digital currencies is more reliable and preferable. It is easier and reasonable to use this new asset. It is worth investing in Bitcoin. Bitcoin is truly decentralized, there is a finite supply, and it can be used to transact with anyone from anywhere in the world. Moreover, the value of Bitcoin is high for investors, and they can gain high profits.