When Bitcoin became a worldwide sensation in 2017, rising over 1,600% for the year, it would have been easy to ignore it as some fad-driven solely by speculation.
Despite a depressed market for cryptocurrencies in 2018 (Bitcoin has plunged more than 80%), this new asset class hasn’t disappeared because it offers benefits, some of which are unique:
- Cryptocurrencies are digital, making them easy to store, trade and spend
- Cryptocurrencies records are forever. As long as there’s an electric grid, the ledger tracking the coins will continue
- Cryptocurrencies are often designed to prevent inflationary pressures by limiting the number of coins that can ever hit the market
While it is exciting to see an investment jump to such lofty heights, cryptocurrencies’ poor performance in 2018 highlights some of the weaknesses in the asset. Like other speculative financial bubbles (remember the Dot-Com bust of 2001?), you can take a look at how far bitcoin has fallen — down 80% in 2018 — to get a sense of the nerve-racking ride cryptos to provide. While the digital coin is back on the rise, it is fraught with booms and busts.
It is a good start for something new, but the cryptocurrency journey remains far from a perfect. Why? There are a few reasons.
Cryptocurrency Prices are Driven by Speculation
If you round up every cryptocurrency, all 2,000-plus of them, the total market capitalization stands at around $132 billion.
Gold, by contrast, has an above-ground stock valued at $7.8 trillion.
Cryptos, no matter which coin you invest in, represents a very small market. With enough financial backing, an individual investor can move an individual coin price. This happened in 2017, when a number of new investors flooded in, speculating that the new-age currency could become a boon. When everyone started trying to collect on the gains, it left the small asset class falling off a cliff.
Cryptocurrencies Have No Inherent value
Cryptocurrencies have no inherent value. Cryptos use strings of codes to govern their rules, provide payments and secure your investment. Without the code, then nothing will remain. You cannot cash in your Bitcoin for tangible investment.
It is why so few people use cryptocurrencies for accumulated wealth, outside of early investors that hold the vast majority of coins.
A Better Way: Link Your Cryptocurrency to Gold
That is why there is value in having a cryptocurrency asset linked to gold, as you can access through OneGold.com.
Unlike cryptocurrencies, however, the price of OneGold moves with the price of gold. Just how important is that? In the past three years, gold has seen prices as low as $1,061 and as high as $1,364. It is a difference of just 29%. That’s significantly less volatility than cryptos, which can see a 29% swing in days (if not hours).
Most importantly, since cryptocurrencies are new, it is hard to predict which ones will survive. That means your cryptocurrency investment could be gone tomorrow. You don’t have to worry about that with OneGold since it’s backed by one of the most historically valuable resources known to man.