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Should you invest in physical gold or cryptocurrencies in 2025 ?

The 30/01/2025 by Sébastien Gatel

Without talking about a ‘match’ between these two categories of assets, it is nevertheless important to understand that we are contrasting two diametrically different investments that are not very compatible at first sight.  

On the one hand, we have a precious metal, tangible and rare because of its extraction, which has survived centuries and crises, and on the other, a totally intangible asset that relies solely on the trust of its users and promises of technological deployment. 

Against this backdrop, should we focus on investing in physical gold in 2025, or try cryptocurrencies?

Physical gold: an essential asset for protection and diversification 

 

1) The advantages of physical gold 

The virtues of physical gold are well established. It has always been a safe haven in the face of geopolitical tensions or economic crises. What's more, at a time when inflation is being fought around the world, gold protects the purchasing power of its holders. 

Its volatility is relatively low over the long term, which will tend to reassure the ‘prudent’ investor.  

Gold is also a physical asset whose physical possession in the form of ingots, bullion or coins is reassuring and particularly satisfying for its holder. 

It is also a universal “currency of exchange” that has the same value and can be traded anywhere in the world.

The purchase price of this asset is sufficiently varied to suit all pockets. At Godot & Fils, our experts offer a wide range of physical gold purchases: 

* ONE KILO GOLD LINGOT, the purchase of which can be pooled between several people 

* 500 GRAMM GOLD LINGOT

* 20 FRANCS GOLD LOUIS PIECE (Purity/title: 900 ‰) 

* 20 FRANCS NAPOLEON PIECE (Purity/title: 900 ‰) 

* SOUTH AFRICAN KRUGERRAND PIECE (Purity/title: 900 ‰)

 

2) The disadvantages of physical gold 

The physical nature of gold can mean that it has to be stored, transported or insured. All these factors can reduce the profitability of an investment. 

Similarly, while gold can generate a capital gain on resale, it does not pay interest or dividends. 

Gold is a historic monetary asset that does not benefit from modern technological and financial innovations, unlike cryptocurrencies.

 Crypto-currencies: an innovative but speculative asset 

 

1) The advantages of crypto-currencies  

Crypto-currencies are growing in popularity and are intended as an alternative to traditional assets. This ecosystem relies on its decentralisation to emancipate itself from any control by regulatory authorities, financial institutions, governments or central banks. 

While gold is rare because it is mined, certain benchmark cryptocurrencies such as Bitcoin are rare in digital terms. 

Cryptocurrencies differ from gold in their ability to generate rapid returns and sometimes astronomical opportunities for gains. 

Cryptocurrencies are accessible worldwide because they are dematerialised.  

It is also easy to invest, even on a small budget, thanks to the fractional nature of these assets.

 

2) The disadvantages of cryptocurrencies 

Volatility can be extreme and it is not uncommon to see a loss of 10 or 20% in one trading session.  

The crypto ecosystem remains technically complex. You need to have some knowledge (crypto keys, investment platform) and be familiar with the various projects to get a good grasp of the investment. 

Crypto-currencies require a great deal of energy to be mined, with the attendant environmental impact.   

Transaction fees can be high on some blockchains, not to mention the cost of securing your digital asset portfolio. 

There are also still many unknowns regarding the regulation and taxation applicable to these cryptocurrencies. While Europe has just adopted a particularly restrictive legal framework to protect investors with MiCA (Markets in Crypto-Assets), the United States under Trump is adopting a deregulatory approach to accelerate the deployment of this high-potential market. 

Finally, we must not forget the intangible nature of these assets. Scams, fraud and piracy are still rife and sometimes highly professionalized. So crypto projects need to be treated with suspicion.

Cryptocurrencies can have a fashion effect, and be associated with divisive public figures such as new US President Donald Trump and his wife Melania. The latter have just launched their own cryptocurrency, does this help the cause of cryptocurrencies? Nothing is less certain. 

These projects have no solid fundamentals; they are marketing tools devoid of any real financial or technological use. This may make institutional investors wary and divert attention from the real innovations of blockchain in favour of partisan and self-serving crypto projects.   

Some will see the Trump family's approach as opportunistic, with the aim of mobilising the ‘fanbase’ for political reasons or raising money and personal enrichment.

Conclusion  

Physical gold remains a benchmark for investors looking to protect their capital during periods of financial market tension. It is unquestionably a hedge and safe haven against inflation and economic crises. 

 

Investing in crypto-currencies is a diametrically opposed strategy, far riskier and more volatile, but one that can pay dividends over the very long term through innovation and the adoption of blockchain technology. Here again, we need to distinguish between Bitcoin and Ethereum, which have solid fundamentals, and the more “exotic” and speculative projects where the risk of capital loss can be total. 

 

In a diversifying approach, it may be worthwhile for an investor to combine holding physical gold in any form (bullion, coins) for security and cryptocurrencies for performance. In this case, the allocation must obviously be adapted to the investor's own objectives and risk profile.


By Sébastien Gatel

Graduated in law and market finance, Sébastien has worked in financial institutions and wealth management for many years. At the same time, he contributes to various media outlets aimed at professionals and individuals, deciphering financial news and simplifying topics related to savings and investments.


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