Bitcoin Or Sleep What will be the golden investment option for you this Diwali? Traditional hedge funds against volatile stock markets or the new age cryptocurrency With never-before-seen returns, Indian investors have a big puzzle to park their hard earned money on during this auspicious occasion.
Gold has always been considered a safe metal for the Indian middle class. From wearing it as jewelery on occasions to keeping it in a locker for generations to come, the yellow metal has also been a favorite choice for many Indians. There is a long standing tradition of buying gold coins and jewelery during auspicious festivals like Akshaya Tritiya and Dhanteras. But can gold beat other assets, especially new age cryptocurrencies, when it comes to investment options?
Cryptocurrencies, especially among millennials, have gained momentum in recent times thanks to huge returns and easy investments. In more than a decade, cryptocurrencies have taken the financial world by storm. Last month, the bitcoin price surged to a new all-time high, breaking the previous all-time high set earlier this year. Around 15 million Indians have adopted crypto and have invested around $10 billion in crypto assets. Financial markets around the world were engulfed by the Covid-19 pandemic last year, but the cryptocurrency market continued to rise to its glory and glory. “Bitcoin was one of the biggest growing asset classes during the recovery period of COVID-19. Returns from cryptocurrency were twice as high as returns from gold in the same period,” said Edul Patel, CEO and co-founder of Mudrex, a global arypto investment platform.
Many Indian families wait for festivals like Diwali to buy gold as it is considered auspicious. Limited supply and high demand for the yellow metal ensure that gold remains a safe asset against inflation. However, recently, there has been a massive change in the mindset of Indians to invest and diversify
asset classes. From an investor’s point of view, WazirX founder Nischal Shetty said, “If we set aside the religious and auspicious aspects of gold, a new challenge to it as an asset class has rapidly emerged in the form of crypto and bitcoin. , which is being seen as the new gold or today’s digital gold. Crypto has the potential to emerge as a new investment option in the festive season for funding for the future. Thanks to people looking for alternative sources of investment “The growing penetration of the Internet and people who have lost faith in the traditional financial ecosystem are now looking at crypto as an alternative to traditional investment channels.”
Experts believe that easy investment and storage options have given the cryptocurrency an edge over India’s favorite yellow metal. Bitcoins can be stored in digital wallets and can be used to buy various things in the market. Many well-known platforms around the world have already started accepting payments in bitcoin or any other type of cryptocurrency.
“Physical gold needs to be stored properly. This in itself is a problem. Bitcoin, on the other hand, is a digital asset and does not require any overhead for storage. Investing in bitcoin is actually a lot easier than gold, and it is much easier to start investing in bitcoin. On the other hand, gold also requires good capital to start. Capital appreciation on gold is quite low. We all know how bitcoin beats all other asset classes in terms of capital appreciation,” Patel further noted.
Gold or Bitcoin: Tips for New Investors in Diwali 2021
Commenting on investing during the auspicious occasion of Diwali, Nischal Shetty, Founder, Wazir X, said, “Some major cryptos like bitcoin are often compared to digital gold by many crypto majors, although gold was recognized in the century and both It is accepted as a ‘store of value’ and a medium of exchange. Therefore it is prudent to say that crypto can be considered as the best option for investment.”
Most analysts suggest adding bitcoin to your portfolio for diversification and huge returns. “Diversification is the key to building wealth in the long run, as it allows one to deal with market volatility. The addition of bitcoin to your portfolio provides a much-needed boost in generating returns. This boost, in addition to a natural hedge against inflation, adds brownie points to bitcoin. The option doesn’t have to be bitcoin vs gold, but it can be bitcoin and gold. So, this Diwali, we might consider adding bitcoin and some other top cryptocurrencies to our portfolio.
For new investors entering the market during Diwali, Kanika Agarwal, Co-Founder, Upside AI said, “The idea of Dhanteras is to invest. The focus should be on investing in an asset that will generate long-term wealth for you. We buy gold because it is a safe asset – a hedge against inflation, currency and macroeconomic risk. It is negatively correlated with equity and therefore acts as your safety net. Bitcoin’s long-term promise is to do (among other things) what gold does. Therefore, your decision on gold versus bitcoin should be based on how long your vision is, how willing you are to take short-term pain, and what your asset structure looks like.”
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