The era of cryptocurrency is upon us. After a spike in prices in late 2017, crypto had a downward spiral and then stabilized at about ⅓ of its all-time high. But late in 2020, a resurgence and renewed interest in the virtual coin began to drive the price higher. With “meme coins” like Dogecoin, as well as new cryptocurrencies entering the market or becoming more popular, investors are buying them in an attempt to get rich quickly.
Does that mean “real” coins and precious metals are dead? The generation of young retail investors might think so. But before you cash in your life savings in stocks, bonds, and precious metals to pursue the hype of Bitcoin and another crypto, don’t write off gold coins and precious metals just yet.
Is the Difference Between Investors Generational or Just a Realistic Approach to the World?
One of the main differences between Bitcoin and gold coin or bullion investors is the age of each party. According to a recent study from crypto brokerage Gemini, the average crypto investor is a 38-year-old white male that makes about $100,000 per year. This isn’t necessarily a steadfast rule, but it’s enough to show that the number of crypto investors spikes with investors in the late Gen X or early Millennial range.
Gold, on the other hand, is often a preferred investment for older Gen X people and the baby-boom generation. The reasoning behind this isn’t understood, but it’s typically the result of major advancements in technology that older generations don’t understand or refuse to use.
But generational differences in investing are merely theoretical. Investors of gold or Bitcoin may choose one or the other based on their worldly views. Older generations are more realistic and have a more pessimistic view of the world around them. While crypto may be a good investment, technology can be used for evil, as well as good. The one thing that people can’t take is an asset that’s in your possession.
Bitcoin investors are the opposite. They perceive the world as inherently good and technology as the next step in human evolution. Through crypto, middlemen such as banks and governments can be removed from the equation, providing a no-strings-attached, purer currency for transactions.
Interestingly, both views want to eliminate the overreach of big government for a more refined way to build wealth and manage transactions without red tape.
Why You Should Still Invest in Gold or Gold Coin
Although highly lucrative, Bitcoin and other cryptocurrencies are highly volatile. With swings of 10% to 20% in a single 24-hour period, it’s a high-risk, high-reward play. Gold, on the other hand, is far more stable. During times of recession, it’s also been a solid investment, maintaining its value or appreciating. For most investors, having at least some portion in gold ETFs or physical bullion is a savvy investment play.
Diversification Is Key
Although Bitcoin or other types of cryptocurrencies may seem like the future of the markets or how people pay for goods, none of these coins is a certainty. With more than 4,000 cryptocurrencies currently available, choosing the ones that succeed over the potential failures is an uncertainty that’s difficult to ascertain or study. Thus, diversification is key. While adding crypto to your portfolio is an important move, don’t forget to diversify with precious metals. In times of economic downturn or poor economic performance, it’s the one investment you’ll be glad you have.
As an Orange County coin dealer that buys, sells, and trades gold coins, bullion, and precious metals, we have hundreds of customers in various age groups. The demand is currently high for any type of precious metal. We ask our customers to contact us and book an appointment before coming in. If there’s a large quantity to sell or purchase, please call us first. We want to ensure you get the attention and time needed to help you.