The cryptocurrency market continues to set new records, surpassing the $3 trillion mark in 2024, while gold remains a traditional means of capital preservation. Will digital assets completely replace precious metals in the coming years? Writes TSN. This is reported by Kontrakty.UA.
For centuries, gold has been the primary means of capital preservation due to its stability, physical form, and global recognition. However, with the advancement of technology, cryptocurrencies are beginning to fulfill a similar role, offering fast transactions, high liquidity, and independence from traditional financial institutions.
Cryptocurrency and Gold: Competition or Coexistence?
According to data from the world's largest cryptocurrency exchange, Binance, the market capitalization of cryptocurrencies exceeded $3 trillion in 2024. In October 2024, the digital asset market surpassed the $2.5 trillion mark, and just a month later, this figure rose by another $500 billion.
Meanwhile, the total value of gold is estimated to be between $13-15 trillion.
Advantages and Disadvantages of Both Assets
Gold is a reliable asset with a millennia-long history, providing stability and low volatility due to its physical format. However, ownership comes with additional costs for storage and transportation.
Cryptocurrency is distinguished by high liquidity and transaction speed, and it is free from geographical limitations, making it attractive to modern users. However, it is characterized by significant volatility and is subject to regulatory pressure, which can impact its stability and security as an asset.
What to Choose and What Do Experts Recommend?
Most experts say that gold traditionally remains a "safe haven" for investors, especially during economic instability. It retains its value even in times of crisis, while cryptocurrencies can experience sharp fluctuations.
At the same time, cryptocurrency has the potential to transform the global financial system. Experts emphasize that one of the key trends in 2024 was the integration of digital assets into traditional financial systems. Analysts predict that banks will begin to actively use cryptocurrency for international transactions, which will contribute to their growth and stabilization.