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“You can only pull so much gold out of the ground,” Kevin DeMeritt says. “Even with new technology, we’re having to go deeper and deeper inside the Earth to go get it; that technology is just [adjusting for not] having the gold closer to the surface.”

Adding further pressure, in recent years, mounting interest in physical precious metal assets from both investors and the industrial sector has placed more stress on the current supply.

Central banks, for instance, snatched up gold at an unprecedented rate in 2022 — a year when they truly “entered the market,” Kevin DeMeritt says.

While more precious metal resources can’t physically be created, recycling is one way the amount of available assets can be augmented.

In the recycling process, refineries meltdown items, such as jewellery or coins, or chemically separate them from their alloys.

Efforts to repurpose precious metal assets are ongoing — silver recycling activity, for instance, increased for the third year in a row in 2022, growing 3% during the year, according to the Silver Institute.

Recycling, though, doesn’t appear to be on the verge of drastically increasing silver and other metal reserves. Even with the overall increase last year, certain types of silver recycling only experienced moderate gains, such as jewellery and silverware recycling. 

According to one report, approximately $10 billion worth of gold, platinum, and other precious metals are thrown away every year.

More could likely be done to recycle silver and other precious metal assets. As a result, the demand for gold, silver, and other assets — along with their prices — may remain considerable.

“Put an increased demand on a fixed supply, the price typically goes up,” Kevin DeMeritt says. “It's Economics 101. So I think you're going to continue to see, over the next five or six years, that demand will continue to increase for precious metals.”

Numerous Nations Are Gravitating Toward Gold

Previously, several countries had heartily invested in U.S. Treasurys and other securities; as Lear Capital mentioned in an October 2022 update, though, some have begun stockpiling gold. 

Amid Federal Reserve-driven rate cuts in the U.S. that have affected costs for external investors, S&P Global reported in February that the amount of Treasury securities owned by Japan — reportedly the largest foreign U.S. Treasury securities holder — had dropped 18.5% between November 2021 and November 2022.

U.S. debt holdings in China, another top Treasury securities holder, fell below $1 trillion for the first time in more than a decade in 2022. China’s gold purchasing, however, was so robust that, along with Turkey, it helped drive a 152% increase in central bank-related demand for gold last year, according to the World Gold Council.

“China sold off U.S. Treasurys,” Kevin DeMeritt says. “They’ve been replacing it with gold. Russia has eliminated all of their reserves of U.S. Treasurys — and what did they replace it with? Gold.”

Central banks, in 2022, ultimately purchased a quarter of all the mining supply, DeMeritt says.

“[That] is a huge jump from [their previous activity],” he says. “We have not seen this kind of buying from central banks for 50 years.”

In addition, the gold they snapped up isn’t likely to make its way back to the market soon, according to DeMeritt — who says central banks tend to hold on to what they obtain for 10 to 20 years at a time.

“They’re not speculators; they’re not day traders,” the Lear Capital founder says. “That metal is gone, and you’re not talking about small amounts here. If this continues, as we start to see more financial instabilities happen around the country, and probably the world, that demand from central banks is going to intensify — along with demand from institutional and individual investors.”

With a hearty interest from central banks, gold prices reached notable levels in 2022. In March, U.S. News & World Report reported that gold prices topped $2,000, their highest level in more than a year. Gold prices also exceeded $2,000 per troy ounce during the first week in May, at one point trading just about 25 cents below the all-time high, according to Markets Insider.

Enhancing Available Asset Reserves Can Be Difficult

In 2022, several scenarios impacted production capabilities in countries that supply significant amounts of precious metal resources.

In South Africa — which, with Russia, proves a large portion of the world’s platinum — the mining industry experienced transport issues and adverse weather that threatened production, according to an Economist Intelligence Unit report. Total mine output declined by 7%.

Metals are Russia’s second biggest export, according to a University of Florida analysis. However, following Russia’s invasion of Ukraine, the U.S. placed restrictions on metal imports from Russia, and mine-related platinum production in the country declined in 2022. The mining output of the precious metal had also declined for three years prior.

“Russia [has] a fairly decently sized mining supply of precious metals,” Kevin DeMeritt says. “There’s an impact from the supply.”

Coveted by investors, due to its perception as a hedge against inflation, and performing a key role in industrial and clean energy processes, silver has seen considerable interest in recent years.

However, despite a nearly 6% rise in silver mining in 2021, in 2022, production of the precious metal declined, affected by issues in some of the top-producing countries, including decreased overall output in China and mine suspensions and social unrest in Peru.

“Silver has become a highly in-demand asset,” Kevin DeMeritt says. “Yet the available supply hasn’t vastly increased.” 

Consecutive shortages occurred in 2021 and 2022, according to mining.com — which suggested last year’s deficit may ultimately prove to be the most significant on record. The consistent demand for silver is also expected to result in additional supply shortfalls within the next five years.

When precious metals are hard to obtain, their value can increase. With high demand and lower production, silver prices, for instance, ended higher in 2022 than at the start, according to Lear Capital data.

Gold is a safe asset that has been around for centuries, and with its ability to help preserve wealth in times of economic uncertainty, it can provide many benefits for those looking to build up their savings and hedge against market volatility. In this blog post, we'll take a look at why gold investment is an important part of creating a balanced portfolio, as well as what kind of strategies can make it successful. 

We'll discuss how gold's performance measures up to other assets such as stocks and bonds, offer insight into where you buy gold from and give advice on when is the best time to invest in it. Read on if you want to learn more about using precious metal investments as part of your overall strategy for securing long-term growth!

Overview of gold as an investment asset and its benefits 

Gold has been a sought-after precious metal for centuries, not only for its aesthetic appeal but also for its value. Investors worldwide value gold as a safe asset, due to its ability to hold its value even during times of economic uncertainty. Unlike stocks or mutual funds, gold is a physical asset that can be held and stored, making it an attractive option for those who prefer tangible investments. 

Additionally, gold is widely recognized and accepted globally, making it an easy asset to liquidate if needed. With its stability and consistent track record, it's no wonder why many investors choose to include gold in their investment portfolios.

The importance of diversifying your financial portfolio with gold investments 

Investing in gold has proven to be a smart decision for many savvy investors. It's not uncommon to hear financial experts suggest diversifying your portfolio with gold. Why? Well, gold is considered a safe asset in times of economic uncertainty. It can act as a hedge against inflation and even currency fluctuations. 

Unlike stocks or bonds, gold doesn't necessarily rely on the success of a particular company or government, making it a valuable addition to any portfolio. By diversifying your investments with gold, you're spreading out your risk, which can help protect your wealth over the long run. With all of the benefits that come with investing in gold, it's certainly worth considering as part of your overall financial strategy.

Researching Gold Investment Options

With so many gold investment options available, where do you begin? A good place to start is by researching the different types of gold investments, such as physical gold, exchange-traded funds (ETFs), and mining stocks. 

It's also important to understand the risks and benefits associated with each option. When it comes to investing in gold, many investors choose to do so through a precious metals IRA. In this case, it's important to find reputable precious metals IRA companies that can help guide you through the process and ensure your investment is secure. Overall, with the right knowledge and reputable guidance, investing in gold can be a lucrative addition to your investment portfolio.

Investing in Digital Gold – Exchange Traded Funds (ETFs)

Exchange-traded funds (ETFs) offer a convenient and accessible option for investors when it comes to investing in digital gold. With the emergence of cryptocurrencies, digital gold has gained traction as a valuable alternative to traditional gold. Unlike traditional gold, digital gold can be easily traded and stored, making it an efficient investment option for those who seek to diversify their portfolios. 

ETFs provide a low-cost way to invest in digital gold, with the added benefits of liquidity and the ability to trade on major exchanges. Digital gold ETFs offer investors a chance to participate in the growing market of digital assets and should be considered a valuable addition to investment strategies.

In the end, gold is an attractive investment option for investors seeking to diversify their financial portfolios and protect against the risk of inflation. Investing in gold has several advantages but it’s important to take into account the potential risks involved in making a gold investment. Before deciding to invest in gold, it is important to understand the various investment options available as well as the pros and cons associated with each. 

Whether you choose physical gold through bullion coins or bars, digital gold through ETFs, or any combination thereof, make sure you do your research and weigh your options thoroughly so that you can make an informed decision that best meets your financial objectives. So go out there and start investing in gold today to secure a brighter tomorrow for yourself!

Surely, there is more than one reason for this hype. Research studies have specified that gold not only straightens up an investment portfolio but also gold bullion builds better risk-adjusted returns for investment portfolios. However, diversification is essential while making financial investments. Investors diversify their investments among multiple asset classes to reduce loss chances and increase potential payoff. Let's cut corners to reveal how investing in gold bullion impacts diversifying your portfolio and managing risk. 

Significance Of Gold Investment In Today's World Scenario

Gold is a safe-haven status element of a diversified portfolio because of its significance as a long-term strategic investment. Gold should be valued for being an asset obtained and distributed in a manner consistent with rigorous ESG norms. The potential for gold to protect investors from climate-related threats should not be overlooked. During times of economic instability, investors have been able to recognize much of gold's value over time. 

Gold has always maintained its value and bears no credit risk. Gold's popularity stems from various uses, including investment, reserve assets, jewelry, and technology. It provides long-term returns and liquidity with boosting portfolio diversification. 

Portfolio Diversification & Gold Bullion Investment

Having a diversified portfolio means spreading your investing capital over several different types of assets or investment portfolios. This strategy is not pursued to maximize returns but to minimize risk and volatility. Although the risk is associated with most investment portfolios, a diversified portfolio can help mitigate those risk factors. It is possible to safeguard and even increase your financial standing by investing in gold.

Stocks or cryptocurrencies are not risk-free assets, and you can't ensure they don't go bust. You can lessen your exposure to this danger by diversifying your investment in your portfolio. However, holding physical gold bullion is a fantastic method to spread your investment risk. For the best-diversified portfolio, you can discover Swiss PAMP gold bars

Gold Bullion Investment & Risk Diversification 

Indeed, inflation is a major threat to investments tied to the economy, such as stocks and IRAs, and gold is a buffer against inflation. Your money would have been safe in gold during the financial crisis, and its value would have increased dramatically. Adding gold to your investment portfolio would have lowered your portfolio's volatility and raised your returns.

If your money is invested exclusively in one asset, you are subject to the maximum risks associated with that investment. As a keen investor, you can prefer to diversify your holdings by purchasing multiple equities or contributing to a mutual fund that works automatically. However, even if the stocks are diversified across industries and geographical areas, there is still an overall market risk.

To effectively diversify risk, investments must be undertaken in completely distinct markets, each of which will react differently to the same external factors. This way, if one element of a portfolio underperforms, the others can hold their own or even expand, offsetting the loss. That's why investing in gold bullion diversified portfolio risks. 

In A Nutshell

So, the major attraction of gold bullion and gold stocks is their ability to hedge against inflation and market volatility. As a result, your portfolio benefits from the diversification of risks associated with the multiple assets. By diversifying into gold bullion and stocks, investors can hedge against inflation's eroding effect on their portfolio power. Gold is accepted worldwide and is not tied to a specific country or region, so it is less susceptible to the problems of a specific economy, making gold bullion and gold equities a useful addition to a diversified portfolio. 

Cryptocurrency, like gold, has a similar impact on investors. They have turned the people from rags to riches, the same as gold. The prices of Bitcoin soar high with time. This creates an opportunity for comparison between both of them. Why not? After all the Bitcoins are accepted as business transactions, the same was done in archaic times with gold. So gold or Bitcoin? Let's find it out here.

Gold vs. Bitcoin: Who wins?

We all are aware of gold; the entire world runs with the help of gold. But they are such powerful and defining metals. On the other hand, the rise of Cryptocurrency is meteoric! So let us make a comparative analysis between both of them. 

Gold

Gold has performed well historically during some economic unrest. This is because the metal has a great ability to keep value steady. Know that investors move from stocks to gold if they experience a recession. 

During the great recessions in the USA as well as the Covid-19 Pandemic, many investors moved into buying gold. Increased demand for the metal increased value. The price of gold went from as high as $1300 in 2019 to that $2100 in the middle of the years 2020 and 2021. 

Bitcoin

Bitcoin is a digital currency launched in 2009. It is the oldest Cryptocurrency and holds the highest percentage in market capitalization. The present share of the Bitcoin market is 38.2147%. 

During the Covid-19 pandemic, when everything went into a veritable shutdown, the price of Bitcoin did not decrease. Then continued to pour capital into the hands of the investor. By April 2021, the price of Bitcoin hit $ 61000. Therefore, the advent of Bitcoin is one of the significant developments in the capital market. 

Regulations

You can not acquire as much gold as you want. You will have certain restrictions with the storage of the metals. You will be answerable to the government. The government regulates this. Moreover, the government also keeps gold reserves in its treasury. You can buy and sell gold in the market, and the government will be able to know it.

The regulation of Bitcoin is made based on the country. For example, El Salvador has ratified Cryptocurrency as a legal tender. But on the other hand, China banned Cryptocurrency in the year 2021. So if you trade on Bitcoin, then no one will be able to know how much you trade. By the way, are you trading Bitcoin? You could do it using Cryptocurrency trading platforms to facilitate Bitcoin trading and investment. To learn more, click here

Usage and Utility

Gold, since antiquity, has been a means of exchange. The metal is not used extensively across different industries. However, many products are made with the help of gold. 

On the other hand, if you consider Bitcoin, the utility or usage is quite limited. This is because Cryptos are virtual assets, and they are used as a mode of investment or in buying and selling assets. Therefore, Bitcoin usage is quite limited compared to that of gold.

Arguments in Favour of Cryptos

There are a few arguments that you can produce in favor of Bitcoin against that of Gold. Firstly goldGold does not support any kind of storage option available in the digital world. But on the other hand, Bitcoins are digital assets. Therefore, being intangible, they are safer compared to gold. 

Another argument (though logically not so compelling) is that gold can not be traded easily; you can not take it anywhere. But if you use Bitcoin, you can do it easily with just a few fingertips.

The third argument is that Bitcoin has more adoption compared to that gold. Around 47 million people trade in Cryptocurrency, which is quite big compared to Cryptocurrency. So You can trade on Bitcoin as they are the future.

But in 1933, the Federal Reserve stopped using gold as a 1:1 pegged standard, and this caused fiat currency to crash. By giving up, the gold 1:1 ratio gave the government and the banking system unlimited money over people since they could always print money. And it went all downhill from there. And it still crashes through the form of inflation. In this article, we talk about the commodity gold and what the next few years are looking like for it. 

Why gold is a good investment and will stay a good investment

Although the price of gold can be very volatile and have a lot of movement in the short term, in the long term, it remains strong through times of financial crises and recessions since the supply of gold is finite. There is only a set amount of gold on this planet, and when everything is dug up, there is no more; they can’t make it artificially. Everything that can be made artificially is usually cheap and low in value. Medicine, antibiotics and other metals we can make in a lab develop in other ways than actually discovering it is low in value since that supply is infinite, so we peg less value to it. 

So through currency crashes, through times of chaos, gold has been standing tall through all of it. So holding gold on hand or saved away is a way to not only make your money worth more in the long term through the value of the actual gold rising, but it is also an amazing hedge fund against inflation and currency fluctuations. 

What can cause the value to fluctuate so much in the short term? 

People’s buying power. Literary people have more and more money around than 50 years ago. People are finding new ways to make money, and people have started being more intelligent with their money, which makes access to gold easy and thus drops its value. 

External sources of gold. However, this is quite rare, but we have seen meteorites crashing into the earth that contained large amounts of gold, massive amounts. So that drops the value of the gold since before there was this set amount of gold on the earth, but now there is external gold that we got our hands on. 

Price prediction on gold

It is difficult to predict the price prediction on gold for the next 50 years. People that study the patterns and movements of the market year in and year out develop a feel for what is to be expected. You should keep this in mind when considering an investment or spending money. Do your own research, educate yourself, learn more etc. 

I want to leave you with an interesting article on this topic. It is called: gold price predictions for the next 5 years and published by goldalliance.com; it is worth checking out if you want to learn more about this. 

 

Two others are about the magic formula of becoming wealthy by accumulating gold, and how dividend-paying stocks are the ultimate money-making vehicle for personal portfolios.

It's never a good idea to make financial moves based on incorrect data. The smart approach is to study all your options by doing in-depth research on the kinds of investments that interest you most. After spending time exploring all the possibilities and evaluating the various selections, consider putting your money to work for you and maximising your long-term returns. Here are more details about the common money and wealth-related myths.

1. Real Estate Is Out Of Reach For Most Individuals

For more than a century, far too many people have fallen for a host of myths and fallacies about real estate. The list is a long one, but it includes several that directly relate to personal finance. Chief among the misinformation is that real estate is just too pricey for the vast majority of individuals. In fact, real estate can be one of the most profitable income-producing assets in a person's portfolio. Over the long haul of multiple decades, the two most beneficial ways to build personal wealth are through real estate and the stock market. Since the early 1900s, it's been simple to purchase stock, but the same can't be said for property. 

However, recent changes in the way the real estate market is structured have changed that. Today, anyone, even those who only have $100 to invest, can take part in real estate investing via fractional shares and REITs. No longer are equity stocks the top choice among people who want the security of long-term, stable investments. The best way to get started is by learning all the facts about how investing in real estate measures up to traditional corporate stocks. In today's challenging economy, it's imperative for people to learn all they can about real estate vs stock market returns and how to make the most of every financial opportunity.

2. Investing In Gold Is The Secret Formula

Gold can be a smart way to diversify a portfolio, but it's almost never wise to put the bulk of one's investments into the yellow metal. Contrary to hundreds of online and television advertisements, gold is not a secret or guaranteed way to earn short or long-term profits. It has a few unique qualities and can perform well in weak economies, but during good times, it's not such a wonderful place to park capital. As of late, there has been a valid argument made regarding investing in gold vs bitcoin that is worth your time and research as well. 

3. Dividend Stocks Are Guaranteed Winners

The current preference among investors for aristocrat shares is based on a misconception. That's not to say that the aristocrats are not excellent additions to certain portfolios. The myth is about the promise of these long-term dividend payers to generate a significant amount of income. The corporations in the category can and do pay regular percentages of their income to shareholders regularly. But they don't always perform well or offer the best opportunities compared to other kinds of stocks and commodities.

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If you're still having doubts, there's an evident growth among several popular metals in the market. The increase in the demand for precious metals might have something to do with several current trends. Among the precious metals, gold is the most popular and recognised as the most secure when it comes to value. An advantage of gold is that any fluctuations in the supply and demand of other assets won’t affect its value, making it the ideal option during trying times. Additionally, it has a variety of practical uses in various industries. If you're eager to know more about precious metals, it might be time to find out more about these metals to help you make the right choice if you're going to invest someday. 

If you're going to add precious metals to your investment portfolio, it can bring about several benefits in the long run.

Here are several top reasons you should consider investing in precious metals.

1. Easily Accessible

Some of the favourite precious metals like gold and silver are widely available via market dealers, banks, and bullion brokers. Aside from the accessibility, you don't have to worry about not acquiring enough due to the abundant supply in the market. You may consider adding several to your investment portfolio as long as you have the funds.Additionally, you'll enjoy the variety of options. Silver might be worth checking out if you want to try out other metals aside from gold at an affordable price range. Bars of gold and silver

2. Immunity To Inflation

If inflation occurs, you don't have to worry about your precious metals. If you're about to add gold to your investment portfolio, it'll not shift in value and you can turn to it during times of uncertainty. When you have a supply of gold on hand, it's an advantage if an inflationary spike occurs in which everybody is eager to buy the metal. In such scenarios, you can readily sell your gold at a good value and gain a good return on your investment. If you want to avoid the inconvenience due to inflation, consider investing in precious metals so you'll have an investment you can later gain a good profit from.

3. High Liquidity

When investing in something, you need to consider whether you'll get a good return on your investment. Sadly, depending on the assets you have, it might be hard to sell at some point, especially when you have several properties on your portfolio. One of the main advantages of investing in precious metals such as gold and silver is the high liquidity. Unlike with other forms of investment that can take time to sell, there are always eager buyers when it comes to precious metals. Additionally, you can get a reasonable price from metals these days.

4. Safe Form Of Investment

If you prefer to maintain a low-risk investment portfolio, precious metals such as gold and silver are worth considering. Over the years, both metals have been suitable choices as safe-haven investments. The term refers to precious metals that offer investors stability when an economic crisis occurs. Even when the economy plunges into an undesirable state, the value of gold stays the same or even rises on certain occasions. Additionally, gold and silver aren't subject to any government influence, allowing these precious metals to hold their value.

5. Universal Use

Among the precious metals, gold and silver are present in various products, including jewellery, electronics, batteries, phones, silverware, and cars. These metals are highly valuable in large-scale industries and manufacturers, ranging from solar panels and even products with medical applications. With the essential nature of both gold and silver, there’ll always be a continuous demand in the market. Both alternatives are worth examining if you intend to invest in precious metals.

6. Changing Prices

If you wish to invest in precious metals, especially gold, you should be aware that the price fluctuates frequently, but this shouldn’t be a hindrance if you want to diversify your portfolio. Generally, the value of gold tends to vary depending on who's selling it on the market. Similar to a stock market investment, you're likely to find the metal at affordable prices, and you can sell it later at a reasonable price. The only difference with precious metals is it's something you can hold. Even if the stock market crashes, you still have gold in your possession, which will hold a certain degree of value. Remember that although the price of gold and other metals constantly fluctuates, they're suitable investments to consider.

Final Thoughts

If you're planning on diversifying your investment portfolio, you have several notable options worth considering when it comes to precious metals. When you're ready to boost your assets, it might be time to consider investing in gold, silver, and platinum. Aside from the versatility of precious metals, they can help you gain extra income and function as a safety net you can turn to when times get tough.

This isn’t surprising considering that throughout the course of recent history cryptocurrencies went from being regarded as a channel for money laundering to becoming a serious proposition for investors very quickly. It now is not just for the opportune amateur investors that’ve got caught up in the media hype as even big businesses and knowledgeable entrepreneurs including Elon Musk have their eyes on the digital currency and many consider it as a genuine form of payment as a result.

Now, we can see major banks testing the crypto waters as they’re simultaneously entering the race to set up their crypto-related operations. Amongst these are the likes of Morgan Stanley and Bank of America launching their own crypto-focused research divisions. State Street revealed their dedicated digital finance division to the public, and following this, JP Morgan and Goldman Sachs have started rolling out their own crypto trading assistances and services.

Our traditional understanding of an asset in finance terms is generally anything of worth to an individual or company, or more specifically it can be regarded as a resource ‘of value’ that can be, in turn, converted into cash. Typically, an asset can often generate cashflows. For instance, stocks can provide dividends, bonds can provide coupons, loans can provide interest, etc.

However, there are assets in existence that don’t tend to produce cashflows, but they’re still regarded as an important asset class. For instance, this can include assets such as gold, wine, and even art. Gold is widely considered to be an important asset class by many. This is the case considering it has limited industrial use that doesn’t generate cashflows. The collective thought is that gold is valuable, and this is what provides the value to the asset; an inflated artificial value that we give to a shiny lump of metal.

This can in turn apply to any fiat currency as money is only a credit that a currency’s user gives to the issuer. Thereby, for a currency to prosper, belief and confidence is the most important factor for its success. The issuers of fiat currencies are sovereign entities that are deemed to be the most trustworthy. If an economic crisis occurs that leads to governmental distrust, the value of the fiat currency has the potential to drop substantially.

Risks do exist and they are well known, and some would argue, substantial.

In the past, financial institutions and investors have primarily recognised only “traditional” asset classes. They regard cash and equivalents, bonds, and stocks as the big three. However, since the rise of cryptocurrency (a decentralised means of digital currency) in our society, many have questioned whether they should also be regarded as an asset class. This debate is more important now than ever before, especially as legislators and policymakers have continued to ponder upon taxing cryptocurrency in line with other assets.

Professionals must now begin to change their outlook on cryptocurrency and adapt processes to enable investors to deal with cryptocurrency more effectively. Gone are the days of solely dealing with traditional assets. 

There is a broad consensus that Bitcoin is the most valued—and thereby appealing—cryptocurrency on the market. Experts have largely accredited this to its scarcity, Bitcoin in particular benefits from investor confidence because of its snowballing popularity. Just as people in society believe in the value of diamonds because others believe in it, Bitcoin shares this artificial value.

Bitcoin was the first scarce digital asset ever created. Societies have always based the price of a currency on this concept of scarcity, which is why precious metals have been the pillar of many economies for centuries. Bitcoin supply had low inflation built-in from day one. To ensure that the issuing of Bitcoin would eventually cease completely, its creator Satoshi Nakamoto encoded a way to halve Bitcoin’s mining reward roughly every four years; the Bitcoin supply will thereby never exceed 21 million coins.

But what is driving that faith? And what is underpinning the huge increases in the value of cryptocurrencies? This is more to do with its ability to store worth relative to other asset classes. Widespread social adoption, together with their privacy, security, and transferability, make cryptocurrencies a significant asset class to store values.

Cryptocurrencies do not follow the same rules as fiat currencies, or even secured assets; instead, matters tend to get complicated. Given that a cryptocurrency does not generate or support cash flow, it needs to be valued against potential and —critically—future prices.  That then opens the door to several different valuation methods and guess what—our old friend gold is back. Amongst the differing valuation models now available—the stock-to-flow method, institutional participation method, and high-net-worth participation method—we find the gold valuation method.

But let’s not forget this is a new asset class, so we would expect investors will consider a range of valuation methodologies to estimate future value. This is, however, not risk-free. It is a new asset class and one that does not exist physically. It is not gold, as we have repeatedly said. Risks do exist and they are well known, and some would argue, substantial. We are therefore firm believers that the financial industry needs to address—and support—government initiatives around regulation.

The key questions remain: Should institutional investors dive in, and is this in fact a dedicated new asset class?

El Salvador became the first country in the world to adopt Bitcoin as its national currency, allowing people to use a digital wallet to pay for everyday goods. Many countries are considering issuing their own central bank digital currencies. All these developments tell of cryptocurrencies’ future potential in line with an asset class.

The primary reason why some do not regard cryptocurrency as an asset class is because of its unclear regulatory environment and high volatility. However, more and more institutional investors use cryptocurrencies to hedge against inflation and currency debasement and to diversify their portfolios in the pursuit of higher risk-adjusted returns.

This is, without doubt, a new asset class and one that will increasingly gain acceptance and the participation of institutional investors as time goes on.

A gold IRA refers to a specialised individual retirement account. You’re enabling investors to acquire gold and other precious metals in the form of bars, bullions, and coins to be part of their retirement investments. When you invest in gold through a gold IRA, you can have peace of mind knowing your precious metals are safe from the start. This is because gold serves as a protection against inflation and other market crashes. However, setting up this retirement account can be complicated when you don’t know where and how to start. Read on to learn how to invest in a gold IRA with these five easy steps. 

1. Understand How The Account Works  

Before you can officially set up your gold IRA, it's best to know if this retirement account can work for you and your financial situation. To get started, below are a few things you need to know: 

There are many things to keep in mind when opening a gold IRA. As such, you should check out a number of resources before committing.

2. Pick A Gold IRA Company  

Now that you're familiar with the essentials of a gold IRA, the next step is to choose a company that can help you open an account, along with other tasks such as transferring funds and purchasing precious metals. A gold IRA company may also serve as your account custodian since they can also assist with the necessary paperwork and comply with the Internal Revenue Service (IRS).  

Picking a gold IRA company should be done thoroughly if you want to achieve the best possible outcome. For instance, it will be best to consider the following factors when making a selection: 

 3. Fund Your Account 

Now that you’ve found the right company for your investment, the next step is to fund your account.  By doing so, you can start investing. Typically, funding your gold IRA can be done in the following ways: 

 4. Choose Your Precious Metals 

Once you have the funds in your account, you can start selecting the precious metals you want to invest in for your retirement. You can also invest in other precious metals like palladium and platinum for your gold IRA.

Seeking assistance from a precious metal specialist can be an excellent idea in knowing which metal to include in your investment portfolio. With them at your side, you can make sure the metals you choose adhere to specific IRS rules and regulations to avoid mistakes. For example, if you're investing in gold bars, bullions, and coins, you need to ensure the gold is at least 99.5% pure for an IRA.  

5. Purchase Your Desired Metals  

After choosing your gold and other precious metals, the next step is to buy them. You may work with your gold IRA company to keep it safe and secure. However, when it comes to purchasing your desired metals, the process usually varies. This will depend on the account custodian you'll be working with. Some custodians allow you to buy your investments directly from them. While others would require you to purchase your metals from a separate dealer and let the custodian facilitate the buying process on your behalf.  

Takeaway 

Retirement is one of the essential stages of life. As you withdraw from your active working life soon, it's important to become more financially stable to ensure comfortable retirement years. Therefore, if you're looking to set up a gold IRA account, keep these steps in mind to jumpstart your investment efforts as soon as possible.  

Launched in 2009, Bitcoin signalled the start of the cryptocurrency movement. Despite there still being plenty of mystery surrounding its creation, Bitcoin mania shows no signs of slowing down.

On its way to becoming a global currency, more merchants are beginning to accept Bitcoin as a legitimate payment form, and some cities around the world even have dedicated ATMs for the cryptocurrency. Some of the first tangible items ever purchased with Bitcoin were two large pizzas in 2010, the value of which today would be worth more than $190 million. Although it continues to attract scepticism from the world’s central banks and many institutional investors, cryptocurrencies don’t deter the savvy capitalist.

As an investor, it is important to create a diverse portfolio that contains both safer and riskier investments. Ideally, it should include a mixture of stocks, fixed income, and commodities, such as gold. Although adding cryptocurrencies to a portfolio is perhaps considered risky, having a good spread of investments avoids creating an unnecessary threat to your capital and protects your assets against economic turbulence. Smart investors should work towards building a complementary and well-balanced portfolio and, in the modern market, this often includes cryptocurrencies.

Over the past year or so, the perception of Bitcoin has slowly begun to change. Initially, it was misunderstood by people and labelled as untrustworthy and vulnerable to extreme short-term fluctuations in value. However, as household names such as John Lewis and Tesco continue to endorse Bitcoin and even accept it as a legitimate currency, attitudes are beginning to shift. Whilst there is still a long way to go in terms of regulation for Bitcoin, the reputational troubles it once faced have started to recede.

It is important that those looking to safely incorporate both gold and crypto into their portfolios use regulated providers.

Despite this, investors should still tread with caution when investing in cryptocurrency. As a relatively new currency, there is a lack of historical data and analysis that can be used to predict long-term performance. Unlike fiat currencies, such as the British pound, Bitcoin has a maximum supply of approximately 21 million coins. This has led some to believe that the scarce asset will continue to increase in value as government-issued currencies decrease. Others believe it could eventually become the first truly global currency. However, due to its unpredictability, investors should avoid ‘putting all of their eggs in one basket’ and consider adding other valuable commodities to their investment portfolios, such as gold.

While they are both finite resources, Bitcoin and gold play very different roles within an investment portfolio. Many people choose to invest in cryptocurrency for capital appreciation and because its volatility often leads it to being viewed as a quick way to make money. Gold, however, is often associated with longevity and is seen as a tool of wealth preservation. With a track record of thousands of years, the precious metal still carries importance in today’s society. Although its price has varied, it has remained consistent and increased by an average of 49% over the past five years, making it a safe addition for any investment portfolio.

Ultimately, gold and Bitcoin go hand in hand. Historically, when Bitcoin has crashed, gold has rallied and vice versa. The two assets can be very complementary and investing in both could help towards building a portfolio that benefits from both long and short-term profits, providing it is done safely.

It is important that those looking to safely incorporate both gold and crypto into their portfolios use regulated providers. Ideally, the company should also have a proven track record with other investors; this is particularly important for cryptocurrencies, where the landscape is still unfamiliar. Whilst newer cryptocurrencies, such as Dogecoin, can seem attractive to investors, their relative newness to the marketplace means that investors should proceed with caution, especially until more is known about their vulnerability to fluctuations.

By investing in both gold and Bitcoin, investors can also lower the risk of their portfolio and ensure that not all of their capital is tied into a high-risk investment, such as Bitcoin. By periodically converting some cryptocurrency into a more stable asset, such as gold, investors can potentially shield themselves from some of the currency fluctuations they may be exposed to if their investment portfolio was fully focussed on Bitcoin.

First time investors should do plenty of research beforehand and possibly even seek the advice of a professional adviser, to ensure they are being smart with their investments.

Whilst it is likely that Bitcoin is here to stay and will continue to gain popularity, investors should still tread with caution. Until a more concrete regulatory system is put in place, cryptocurrency will remain volatile. Smart investors should ensure their portfolios are well-balanced with other investments, such as gold or other precious metals, to protect their overall worth and create a safe haven for the future.

 

About Minted   

Founded in 2018, Minted is a technology platform where anyone can buy, sell, save and transfer physical gold. With an easy-to-use mobile platform and app, Minted makes buying gold simple, safe and affordable. Customers can set up flexible savings plans and invest amounts of their choice into gold each month. With market-leading buying rates, Minted is the only gold savings app where users can get ownership and delivery of pure 999.9 24kt LBMA physical gold.    

Minted’s users aren’t tied into a contract and can sell their gold instantly, at any point, at better rates than on the High Street. Regulated by the Financial Conduct Authority, users’ gold is safely stored in a high-security UK London vault and is fully-insured to market value.  

The leadership team includes co-founder and CEO Hamzah Almasyabi, co-founder Haroon Siddiq, co-founder and consultant Shahid Munir, and managing director Rebecca Hutchinson. 

Visit the Minted website to find out more about buying and saving in gold: https://theminted.com/

Gold is one of the longest-standing assets in the history of human investment. The asset has long been a store of value for hedging the economy. For some time, gold was even the basis for the US dollar’s value. However, a new asset has come into play: Bitcoin.

Considered by many to be digital gold, the next step in the precious metal’s history, investing in Bitcoin is debatably a good idea. If you’re unsure as to which is the best place to put your money, this guide is for you. We’ll break down the pros and cons of each investment, ensuring you know just where your funds should go. That, and we’ll establish the best places for you to invest in such assets.

Investing in Gold in 2021

Long-term investors might recommend still investing in gold. It’s what they know, after all, and it’s what made them successful in the past. They’re not entirely wrong, either.

For one, gold is still a reliable asset. It’s not too volatile, nor is gold going anywhere anytime soon. There are multiple ways to invest in it, as well.

Online gold exchanges, for instance, allow you to invest anonymously and with just a debit or a credit card. You simply have to create an account on the exchange and go from there. You can purchase the assets on the exchanges without much trouble, thanks to their various trading methods. They also allow you to hold the assets in a wallet - much easier than storing them with traditional gold.

Otherwise, investing in gold is expensive. You’ll need enough funds to afford a whole unit of the metal to start. On top of this, you’ll need to pay extra in vendor and convenience fees. Then you have storage fees.

Gold is still a reliable asset. It’s not too volatile, nor is gold going anywhere anytime soon.

Storing gold is pricey. You can’t just keep it in your home. You need a safe to put it in. Safes can be expensive, though they’re worth it to protect your investment. Otherwise, you can pay a monthly fee to store it in a third-party space. However, note that you’re putting control of your assets in someone else’s hands if you do so. This is also an endlessly recurring cost on your investment.

Also, while gold is a fantastic stable investment, it’s not a great one for short-term profits. Sure, the asset may rise in the long-term, especially when considering the global economic climate, but otherwise, it stays around the same price. It could be years before you see a significant profit on your gold investment.

If you’re risk-averse, then this is great news for your investment personality. Otherwise, you may want to put funds elsewhere.

Investing in Bitcoin in 2021

Bitcoin is based on a blockchain. There’s no intermediary to go through, meaning transaction fees are much cheaper than otherwise. It’s also a global currency, allowing you to convert Bitcoin to any fiat, and vice versa, no matter where you are in the world.

On top of this, there is a limit on Bitcoin. There can only ever be 21 million of the asset, preventing inflation that fiat currencies are susceptible to. No one can create more Bitcoin - only that which is in the market can be traded. Bitcoin is verified by miners, users that take advantage of their computer’s power to ensure there isn’t any double-spending or similar bad activities.

Becoming a miner is difficult, but they are rewarded handsomely in Bitcoin. The more miners that are out there, the more Bitcoin that is put into circulation. Over time, this makes the asset less rare, eventually causing the price to stabilise. However, note that getting in early, assuming the asset is successful, would mean holding such a rare asset once it stabilises.

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Speaking of stabilisation, Bitcoin is much more volatile than gold. The price has gone up or down by the thousands in just a day, throwing off many investors. Those who aren’t a fan of risk might want to heed this activity. Of course, this is great for short-term profit if you’re smart. The long-term prospects of Bitcoin are yet to be decided.

Conclusion

Now you’re aware of both Bitcoin and gold. Decide which is best for your investment portfolio in 2021. That way, you’ll be better off in the future with your funds.

Tesla, the world’s highest-valued automotive company, bought around $1.5 billion worth of Bitcoin in January and signalled its intent to start accepting the cryptocurrency as a form of payment.

In a securities filing on Monday, Tesla said it had “updated its investment policy” and was looking to invest in “reserve assets” such as gold, digital currencies o gold exchange-traded funds. The company also said that it had purchased $1.5 billion worth of Bitcoin and could “acquire and hold digital assets from time to time or long-term".

"Moreover, we expect to begin accepting Bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis," Tesla continued.

The news promptly caused the price of Bitcoin to surge 14% to a record high of $43,968 per token.

Tesla’s move into Bitcoin represents a significant milestone in the cryptocurrency’s uptake among businesses. While some financial institutions, including PayPal, have moved to adopt the currency as an accepted form of payment, Tesla is the highest-profile non-financial company to invest heavily in it.

With Tesla’s cash and cash equivalents coming to around $19 billion at the end of 2020, its new Bitcoin investment is also a significant move for the company itself.

The development comes on the back of comments from Tesla CEO Elon Musk, who stated that Bitcoin was “on the verge” of becoming more accepted among investors.

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“I was a little slow on the uptake,” he said in a chat on the social media app Clubhouse, adding that he should have bought into Bitcoin eight years ago.

Musk has also recently become one of the principal drivers behind the dogecoin cryptocurrency, with his “joke” comments about the digital token raising its market value by over 800%.

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