Results will appear in an upcoming Yahoo Finance article. I'm not convinced it has that much upside, but it will move much higher than it stands today. Bitcoin Considered A Commodity? Addition of a dividend ETFs means Schwab offers more than bitcoin commission free. This is why it's getting more difficult to compare gold against cryptocurrencies.
Even though by itself it is a nice-looking metal, it has value because we say etf does. Factors Linked To Business Cycles. Currency Currency Hedged U. Earlier this year, the SEC had rejected bitcoin ETF applications including one proposed by Winklevoss twins but they are now reviewing the decision again.
Comparing apples to apples or oranges to apples? Bitcoin highlighted gold and the U. Now we're seeing etf contracts with Ethereum, and a move bitcoin enhancing financial services with Ripple.
I believe they still have a lot of room to grow, but the huge gains have, in general, already been made. What price should they pay? I have no business relationship with any company whose stock is mentioned in this article.
I've heard some that talk about gold in a way that undermines its historical value, by which I mean dividend call it nothing more dividend a rock that is taken from etf ground.
Bitcoin ETFs on the way? This is why you have to set up your cold wallet correctly. In that regard, using paper and a digital storage device is probably the best way to keep it available to you. If one were to fail, you have a backup. Most investors get intimidated by the process of being your own bank, which is essentially what I'm talking about here, so they either don't invest because of fear of losing their money, or don't take the proper precautions to protect themselves.
One thing I would recommend never doing is giving up the protection of your keys or password to a 3rd party. Keep it in a cold wallet. As I wrote recently, one of the easiest ways to take a meaningful and potentially very lucrative position in cryptocurrencies is with Overstock OSTK. It's the third-largest investor in the sector as I write, and it has the potential to double, and probably even do better. It doesn't have as much liquidity with its volume of 57, but it performs close to the price movement of Bitcoin itself.
That means it's a volatile holding that will experience wild price swings. It's not for the faint of heart, but if you believe Bitcoin has a lot of growth left in it, it's something to consider. The company "operates as a cryptocurrency mining firm.
The company focuses on building a bridge from the blockchain sector to traditional capital markets. It mines multiple cryptocurrencies, such as Ethereum, Monero, and ZCash.
The latter will be used for general working capital, while the former was used to acquire "cryptocurrency mining equipment located in Reykjanes, Iceland. Finally, one more company to seriously consider is Global Blockchain Technologies Corp. BLKCFwhich is listed on several other exchanges as well. What's most impressive about this company is the team it's put together.
At this stage of the market, one of the most important factors to consider when investing in cryptocurrencies or the blockchain is the management team in place.
This is one of the strongest, if not the strongest I've found. One thing gold has that cryptocurrencies don't is it is used to make stuff too. It is used industrially, and also to make jewelry for brides in India, among other things. In other words, while its value as a precious metal and store of value is imputed, it has other uses that relate to different markets.
That said, the primary driver of gold prices over time is its imputed value, store of value, and protection against inflation. The rest, specifically in the case of Indian women, is seasonal. This is only conjecture, but it would be fascinating to see how a gold-backed cryptocurrency would do. With the idea of scarcity, it would align with one of the most important reasons for Bitcoin emerging in the first place.
Goldman said one of the reasons why gold is preferable to Bitcoin is Bitcoin is very volatile. While that's obvious, gold has a lot of volatility inherent in it as well. It's also subject to decisions made by the Federal Reserve concerning interest rates and the effect on the strength or weakness of the U.
At this time, gold should still be considered the best store of value, even though that value is based upon imputation from people, just as the U. What is changing in the cryptocurrency market is the new ones are first being built more like an app as their primary purpose, and a medium of exchange, as their secondary purpose. Now we're seeing smart contracts with Ethereum, and a move toward enhancing financial services with Ripple. Many more uses are here or coming. It's easier with Bitcoin because its primary purpose is to be used to exchange goods and services.
Newer tokens or coins are becoming specialized in services outside of currencies alone, making the comparison with gold, in many cases, impossible. Many supporters of Bitcoin and other cryptocurrencies want it to be an alternative to gold. Some reasons are the mobility of the digital coins or tokens, and the anonymity included with it.
Some people unfamiliar with cryptocurrencies think they retain their privacy. The exact opposite is true. The nature of cryptocurrencies is they must be validated or confirmed; that means there is no privacy whatsoever.
Why this can get confusing is a lot of people consider anonymity and privacy as the same thing. How it works is the transaction will be seen by those that are required to validate it, without knowing who is involved with the transaction. No one knows who the parties are that are engaging in the transaction, but the transaction itself is there for all involved in the process to see.
How it works is a peer-to-peer network records and then validate transactions across a network of computers. This is where the transactions can be seen, but those engaging in the transaction remain anonymous. They're attractive because records of the transactions can be viewed and added to, but not altered.
When considering the best store of value, what must be taken into account is the future increase in assets quality cryptocurrencies will bring. Gold can protect against asset erosion when inflation climbs, but if a cryptocurrency soars in price and is sold for a huge profit, that's also a form of protection against erosion of assets; in that case by growing them far beyond the rate of inflation.
I think it's a good idea to hold physical gold while taking a position in cryptocurrencies to have the potential to grow your asset base in a big way. It's far too early to think in terms of abandoning gold and replace it with cryptocurrencies, even if there are similarities in how they react to economic stimuli.
Gold has thousands of years of proof of being a consistent store of value. That isn't going to change. Whether or not cryptocurrencies will have a competitive store of value has yet to be proven. At this stage, we don't even know which coins or tokens will be around even a year from now. There is potential for cryptocurrencies to have a store of value superior to the U.
I think we'll have to wait for regulation to be enacted before we know the long-term picture with any clarity. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it other than from Seeking Alpha.
Please be aware of the risks associated with these stocks. What makes each one valuable? Should Bitcoin be considered "digital gold," or is it a misnomer? Which is a better store of value? Why gold and cryptocurrencies have value I've heard some that talk about gold in a way that undermines its historical value, by which I mean they call it nothing more than a rock that is taken from the ground.
But you could say the same thing about the U. Seeking Alpha pays for exclusive articles. Payment calculations are based on a combination of coverage area, popularity and quality. Want to share your opinion on this article? Nasdaq has also joined the race and is planning to launch bitcoin futures as early as the second quarter of Launch of futures would be a major step in the cryptocurrency becoming mainstream, as derivatives will provide much needed liquidity and also legitimacy to it.
Many traders and investors have avoided bitcoin due to its extreme volatility. Derivatives will provide them an easy way to bet on the price of cryptocurrency, both up and down, as well as hedge their exposure.
Further, many institutional investors are prohibited from investing in bitcoin directly and derivatives would provide them a way to invest in it. Traders love volatility and with stock market volatility so low over the past few months, many of them may embrace bitcoin to make or lose money on its wild price swings. Bitcoin price may get further boost as it becomes mainstream. On the other hand, it will also provide an opportunity to skeptics of bitcoin to short it as making negative bets on it are not easily possible as of now.
Futures are also expected to pave the way for approval of bitcoin ETFs. ETFs would provide investors a convenient way to get exposure to bitcoin. There were some filing for ETFs that track bitcoin derivatives. However, they were withdrawn since the SEC does not review filing for a fund where the underlying instruments are not yet available.
Launch of futures would definitely increase the chances of a bitcoin ETF. Four sponsors have recently filed for blockchain technology ETFs. Blockchain is the technology behind bitcoin and other cryptocurrencies.
These include Snipe the Trade, Investoo and Invezz. You can get free Litecoins LTC) by using our faucet every few minutes. As of July 2017 AWS has the least expensive offering.