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As the risk of global recession, high inflation, and accommodative monetary policy increases, investors are beginning to turn to assets that can protect the value of their portfolios. Gold, with its long history, has proven itself to be a resilient asset amid various economic crises. On the other hand, crypto assets offer innovative digital solutions through decentralized blockchain technology, promising fast transactions and huge profit potential. Both are often chosen by young investors because they are transparent, have limited supply, and have intrinsic value.

Advantages & Risks of Investing in Gold

Although known to be safe, investing in gold still has pros and cons that must be considered:

Advantages

1. Gold can be a stable asset whose value tends to increase in the long term, even amid economic uncertainty.
2. Gold can protect the value of wealth from inflation.
3. Gold is easy to convert into cash because it can be sold or pawned quickly.

Risks

1. Gold investments do not offer passive income such as stock dividends.
2. Gold is not ideal for short-term investments because its price tends to rise slowly.
3. Gold has a large difference between its selling and buying prices, so it requires the right timing to get maximum profits.

Advantages & Risks of Crypto Investment

Just like gold, crypto assets also have advantages and disadvantages:

Advantages

1. Universal access without geographical or time restrictions, allowing transactions anywhere and anytime.
2. Limited supply, making it relatively more immune to inflationary pressures caused by currency printing.
3. The process is transparent, fast, and efficient.
4. Offers protection against identity theft risks.

Disadvantages

1. The anonymity it offers can be misused for illegal activities, such as money laundering.
2. Its value can change drastically in a short period of time, creating high uncertainty.
3. Its value is very difficult to predict.
4. It cannot be used as a legal means of payment for domestic services.

Comparison of Gold vs. Crypto Returns Over the Past 5 Years

A comparison of investments in crypto and gold over the past five years shows a striking difference in returns. With an initial investment of US$100, we can see the movement in the value of both assets from May 2019 to May 2024.

In 2019, with US$100, investors would have obtained approximately 2.36 grams of gold or 0.026 crypto coins. Five years later, the value of the gold investment increased to US$175.61, representing a 75.61% increase.

Meanwhile, a $100 investment in crypto skyrocketed to $1,632.36. This figure reflects an extraordinary growth of 1,532.36% over the same period.

Overall, the growth of cryptocurrency investments surpassed gold investments by more than nine times. This difference highlights the potential of cryptocurrency as an investment option with significantly higher growth compared to gold.

Source: finansialku.com