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Very few things rattle the investment world as much as cryptocurrency has in recent years. These decentralized digital assets showed up on everyone’s radar thanks to Bitcoin, but the number of crypto offerings has escalated significantly since that point.
Of course, recognition doesn’t necessarily make something a good buy. There are many other investment options available out there, and silver is one that’s been trending upwards recently. Because of this, you may have wondered whether to invest in silver or cryptocurrency.
You should base all your investment decisions on in-depth research, but the following guide will point you in the right direction. There are big questions that need answers when choosing between cryptocurrency and silver as an investment, so make sure your decision is an informed one.
Why Are Silver and Cryptocurrency Trending?
To get a better idea of whether you should invest in silver or cryptocurrency, it’s best to identify why these two options are trending. While there are countless investment opportunities out there, these two assets have been at the top of newsfeeds and media reports for some time now.
Understanding why this is happening is key to making a smart choice when investing. This will also give you a bit of insight as to why many retail investors are struggling with choosing between the two.
Why is Silver Trending?
The real question isn’t “why is silver trending?”, it’s “why is silver trending more right now?” After all, silver has always been a popular investment vehicle for individuals and major corporations alike. Even international banks hold massive reserves of this precious metal for its underlying value.
Talk about investing in silver has increased recently, though, thanks to the contributions of the WallStreetSilver community. Discussion on the forum and among silver investors regarding the devaluation of the dollar and artificially low silver prices has increased exponentially.
Additionally, many members of the community have discussed a potential “silver squeeze” – which might drive the price of silver up due to an increase in demand, limited supply and less silver being mined each year. Even devoid of this modern trend, though, the price of silver has been on an upward slope for years.
These facts make the precious metal seem like a solid choice when choosing to invest in silver or cryptocurrency. Before taking the leap, though, it’s important to know the full story.
Why is Cryptocurrency Trending?
Even when viewed in the most objective manner possible, cryptocurrency has essentially been trending since Bitcoin’s founding in 2009. It has certainly seen increased attention over the years, but 2020 may have been a turning point for this and other cryptocurrencies.
While these digital currencies had already made significant strides, people getting stuck at home during COVID-19 lockdown orders had a massive effect. Millions of individuals suddenly discovered investing from their living rooms, and it wasn’t long before cryptocurrencies benefited.
People who began investing in 2020 made up 15 percent of all retail investors near the beginning of 2021. As online communities of these individuals grew, many found their way to Bitcoin, Dogecoin, and other crypto offerings. Trends like this caused a $1 investment in Dogecoin to be worth $270 in less than one year.
These facts likely make crypto seem like the better option when choosing to invest in silver or cryptocurrency. As the old saying goes, though, the devil is in the details.
Pros and Cons of Investing in Silver
Making an informed decision between two investment strategies requires looking at the pros and cons of each. In the case of silver, there are many considerations to consider before choosing to invest. Whether you decide to purchase silver bars or go a less-traveled route – like buying silver bullets – here’s what you need to know:
Pros of Investing in Silver
- Can Hedge Against Inflation: Silver prices may remain high even as the value of a dollar drops.
- Acts as a Store of Value: People have viewed silver as a precious metal for 6,000 years. No matter how the price fluctuates, silver will always have value.
- Tangible Asset: You can hold silver in your hand. This means it can’t get hacked or lost digitally like cryptocurrencies. It’s also quite difficult to destroy.
- Confidentiality: The amount of silver you own – or even the fact that you own it – is not public record.
- Transferability: You can easily transfer physical silver to heirs or other investors.
- Demand Will Always Exist: Every precious metal has fluctuations in demand, but with silver, demand always exists.
- Multiple Uses: Silver can act as a hedge, but it can also perform well during good economic times since it’s used in consumer electronics.
- Universal Value: Currencies don’t hold the same value around the world, but silver and other precious metals do.
Cons of Investing in Silver
- Premium Costs: You’ll typically pay higher than spot price for silver. This is due to costs related to mining, refining, transportation, storage, and dealers.
- No Cash Flow: Unlike stocks that offer dividends, silver doesn’t create cash flow until you sell it. Of course, this is true for crypto as well.
- Potential Loss: If you store silver at home and it’s stolen, it can be difficult to track. Fortunately, precious metal storage can avoid this risk.
Pros and Cons of Investing in Cryptocurrency
Your choice between silver and cryptocurrency should only come after looking at the facts for both assets. While there are certainly some benefits to the latter – especially if you invested at the right time – there are several disadvantages that make it a risky bet.
Pros of Investing in Cryptocurrency
- High Liquidity – Sometimes: Once a cryptocurrency’s base is well established, holders of its “coins” can easily transfer them for cash, separate cryptocurrencies, and other items.
- No Downtime: You can access your cryptocurrency reserves at any time and from anywhere.
- Massive Gain Potential: If you had invested $1,000 in Bitcoin in 2013, it would’ve been worth $400,000 in 2017. This would have required you to get in early, but it’s still an astronomical return.
Cons of Investing in Cryptocurrency
- Massive Loss Potential: While you could profit handsomely by getting in on the ground floor of a cryptocurrency, you could also end up with something like Lomocoin. This digital coin was worth nearly 700 times less in 2020 than it was in 2018. This means a $2,000 investment at its height would’ve been worth $2.94.
- Insane Volatility: When a single tweet from Elon Musk can cause Bitcoin to tank $10,000, it’s very clear how volatile cryptocurrency remains.
- Dead Coins: For all the great cryptocurrencies you’ve heard of, there are tons laying in the crypto graveyard. If you invest in a digital currency that gets abandoned, you may be out of luck.
- Potential Lack of Access: Passwords protect Bitcoin and other cryptocurrency reserves. If you forget your password, you could end up like the guy who only has two password attempts left before he’s locked out of $240 million.
- Lack of Hedge: Historical data shows that – when the stock market declines – cryptocurrency declines as well. If you’re looking for a hedge against a poor economy, there’s no contest when choosing between silver and cryptocurrency. The former always stands out.
Should I Buy Cryptocurrency or Silver?
Bitcoin, Dogecoin, and other cryptocurrencies certainly make up an exciting corner of the investing world. People have found their fortunes by investing in these digital coins. The people who make real money, though, are the ones who got to the party early.
This is essentially how it works with flavor of the week investments. For instance, anyone who bought Gamestop shares at $2.80 at the beginning of 2020 and then sold at $483 at its height fared well. Those who bought around $350 in January 2021 and sold a month later for $100? Well…
Their investment obviously wasn’t as profitable.
If we look throughout history, though, the winner between silver and cryptocurrency becomes clear.
If you invest in cryptocurrency, you’re taking a major risk. This is true for any investment, but very few reach the level of volatility that digital currency experiences. On the other hand, silver has been a store of value for thousands of years.
And with silver supply crunches becoming the norm, now may be the time to stock up.
Buying Silver with Cryptocurrency
Investors have earned fortunes on the backs of both silver and cryptocurrency in the past. Unfortunately, there’s no real way to determine with certainty how an investment will perform over the short term. When it comes to volatility and uncertainty, though, cryptocurrency takes the cake.
Fortunately, you’re not stuck if you started with digital coins but changed your mind about whether to invest in silver or cryptocurrency. And while the future of these virtual currencies remains unknown, they have reached some level of acceptability in the world of finance. This means you can actually purchase silver with crypto.
Visit our Silver Investment Items page to find the perfect hedge against financial uncertainty, and during checkout, you’ll have the option to pay with Bitcoin and other cryptocurrencies! Won’t it feel much better to have an investment that Elon Musk can’t tank with a single tweet?