Blockchain technology outshines Bitcoin and Gold during global pandemic

   2021-04-07 10:04

As the popularity of cryptocurrencies such as Bitcoin begins to level up with investments made in metals such as Gold, together they have both made significant advantages for investors who have taken a leap to invest in them.

However, thanks to the pandemic and the dynamic shift in investing and the economy, many investors have seen fluctuating losses and gains thanks to the uncertainty of the current business world.

Many investors that backed companies who have exposure to blockchain technology have seen an approximate amount of 54% return on investments over the past year. This is even after considering how hard the global tech market and companies have been hit since the beginning of the pandemic.

What is blockchain technology?

Blockchain technology was first introduced as a supportive technology for Bitcoin. A blockchain is a simple, unchangeable and un-hackable digital ledger that holds transactions in little blocks attached to a chain. The transaction is duplicated and distributed across the entire network of systems on the blockchain, making it available for everyone on the network to see.

Each block in the chain contains various transactions which are recorded on the participant ledger every time a transaction takes place. The database is decentralised and is managed by multiple participants known as Distributed Ledger Technology (DLT).

Although blockchain technology was birthed from Bitcoin and was widely adopted for the use of cryptocurrencies, the way it works and its security has made it a sought after technology. It has been adopted into several industries from banking to education. Blockchain technology is also being used in unconventional ways including placing information online that is subject to be taken down.

How blockchain technology companies have beat the pandemic

The Elwood Blockchain Global Equity Index known as BLOCK Index is a platform that aims to offer exposure to listed companies that are or have the potential to participate in the ecosystem of blockchain or cryptocurrency. It is a collection of 45 companies that deploy cryptography to store information on distributed ledgers.

When considering the index and its multitude of players that are incorporated into it, it becomes apparent that the collective top 10 performers have returned a colossal 54% as mentioned above. Although some of the substantial returns are not directly connected to the blockchain systems, they have significantly helped those organisations level above its peers.

Bitcoin and Gold – friends or foes?

Bitcoin has redeemed itself with a crashing start to the year and is now soaring in value. Its price is thought to have jumped by more than 700% since the beginning of the pandemic, making investors a reasonable sum of money.

However, due to Bitcoin’s fluctuation in value and its uncertainty, many investors prefer investigation in physical products that they believe will never lose value such as Gold.

Many investors invest in Gold through Exchange-traded Funds or buy stock or even buy the physical product itself, which is very popular in the Asian communities. Some do not believe in investing in Gold due to the way the modern world works. Paper notes still hold the top position for investing, and there is still much value to be held in precious metal like Gold for longevity.

Many claim the use of Gold and its investment is best for jewellery. However, what they seem to overlook is that almost all countries have a gold reserve, and so, if it’s not of any purpose, why do countries still hold on to them for rainy days?

Although Bitcoin does seem to be the more profitable contender at the moment thanks to its price, the longevity of Bitcoin or even cryptocurrencies is unknown. Many tech companies like Samsung manufacture smartphones with crypto wallets and organisations like Master Card are trying to make cryptocurrencies more flexible to use. But the facts still remain, Gold has been around for longer and has more of a solid foundation.

The chart above is a clear indication of how much Bitcoin is able to fluctuate in comparison to Gold. The value of Gold is much less in comparison, but from an investors point of view, it does demonstrate stability in price, of course, at the discretion and opinion of the investor too.

As time has gone on, Gold is seen as the king of all precious metals, and paired with diamonds, it can create substantial wealth. Gold is used more as a safety net for investors and is more preferred by investors than Bitcoin.

However, that’s not to say it is better than Bitcoin. Those investors looking for short-term gains on their investment in a fast-paced market are more likely to risk their investments for a multifold investment in a short time. And so they invest in Bitcoin. With significant risk comes big possible consequences. Gold is for investors looking for stability over a more extended period of time with smaller returns.

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CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin59,405 0.34 % 1.59 % 0.58 %
Ethereum2,119.0 0.06 % 1.87 % 0.71 %
Binance Coin474.34 1.66 % 6.76 % 40.77 %
XRP1.290 0.62 % 20.66 % 113.76 %
Tether0.9960 0.26 % 0.41 % 0.45 %
Polkadot40.71 0.73 % 0.07 % 0.56 %
Cardano1.210 0.91 % 0.44 % 1.97 %
Litecoin245.28 2.12 % 9.45 % 15.77 %
Uniswap29.63 0.69 % 0.29 % 1.49 %
Chainlink31.59 0.30 % 0.31 % 2.38 %
Stellar0.5499 0.41 % 12.22 % 24.23 %
Bitcoin Cash666.65 0.40 % 4.27 % 14.59 %
Theta Network12.25 0.67 % 4.20 % 5.11 %
Filecoin177.75 1.63 % 4.74 % 3.82 %
USD Coin1.000 0.48 % 0.14 % 0.39 %
VeChain0.1461 0.79 % 10.44 % 54.56 %
TRON0.1217 0.90 % 3.85 % 31.95 %
Wrapped Bitcoin59,160 0.16 % 1.21 % 0.11 %
Dogecoin0.06352 0.22 % 2.37 % 9.77 %
Solana26.79 2.07 % 4.81 % 35.72 %