Can You Buy Gold with Bitcoin?
Bitcoin was first launched in 2009. Back then, it was worth zero dollars. As of June 2022, one Bitcoin is about $30,000. If you’re kicking yourself for not having bought early, you’re not alone. There are horror stories of people buying pizzas with Bitcoins when the cryptocurrency was worth naught.
Bitcoin prices are highly volatile. Before dropping to $29,989.30 in value on June 2, 2022, Bitcoin was trading for $56,000 in December 2021. Bitcoin price fluctuations are due to supply and demand, media hype, government regulations, etc. Every asset’s value is subject to the market, but Bitcoin is more vigorous.
Gold is another investment tool that’s constantly in demand. Its prices, however, are not as unstable as Bitcoin. Therefore, for conservative investors, gold has always been a haven. If you’re wary as well, take some of your Bitcoin cash and put it in gold? Or should you? But before that, can you buy gold in exchange for Bitcoin in the first place?
This article will answer the question and discuss lots more, which include:
- Can you buy gold using some Bitcoin cash (Spoiler: Yes, you can)?
- Is it worth buying the yellow metal with Bitcoin?
- The advantages of buying gold with the cryptocurrency and one negative
- The process of acquiring gold using Bitcoin
- A brief introduction to crypto debit cards and more
Bitcoin is a complex subject in itself. But purchasing gold and silver, other precious metals or commodities, etc., with the cryptocurrency isn’t as technical. If you don’t know how to shop with Bitcoin or want to buy gold with the digital cash but have no idea how to do it, this article is for you. Keep reading.
Table of Contents
Bitcoin: A Brief Overview
Bitcoin is a decentralized virtual currency. You may use it like other currencies to buy goods or services. Decentralization means any central authority does not control the money. There’s no third-party involvement. It’s peer-to-peer, with no government, bank, or other institution involved.
Introduced in 2009 by Satoshi Nakamoto, Bitcoin is the first cryptocurrency and the most popular. With a value running into thousands of dollars, Bitcoin can obviously be broken into several parts—100 million units, with scope for even more. When shopping, you spend a tiny portion of the currency.
Unlike paper money, Bitcoin supply is limited. Approximately 19 million Bitcoins are in circulation as of 2022. Less than two million Bitcoins are yet to be mined, imputing 21 million Bitcoins in total.
Read more: How Gold ETF Works
New Bitcoins are mined in blocks. In 2009, there were 50 Bitcoins per block. That number has come down to 6.25 coins as of 2020. A total of 144 blocks are mined per day on average. That’s 900 Bitcoins mined each day. On some days, the output could be more or less than 900. It’s believed humans will mine the last Bitcoin available latest by 2140.
Can You Purchase Gold with Bitcoin?
Yes, you can buy gold using Bitcoin. But not all gold dealers may allow Bitcoin payments. Check with the seller before proceeding. Gold dealers who accept Bitcoin payments accept Ethereum and Litecoin too.
Bitcoin isn’t your average currency, and you cannot just buy anything you want to with cryptocurrency, in contrast to what the maker, Satoshi Nakamoto, envisioned. And there are quite a few countries that have completely banned Bitcoin trading and transactions within their borders.
But Bitcoin can still buy a healthy array of goods and services—like gold. And the list of items is only growing as the currency gets adopted by more people.
Is It Worth Buying Gold Using Bitcoin?
Like gold, Bitcoin is a repository of value too. It often gets described as “digital gold.” Physical gold has digital versions, such as gold stocks and gold ETFs. So calling Bitcoin digital gold might seem incorrect. But that’s beside the point.
As for whether you should buy gold using Bitcoin or keep the money in the cryptocurrency itself depends on various factors:
- your investing strategy and goal
- risk tolerance
- capital at your disposal, etc.
If you don’t like how unpredictable and erratic the cryptocurrency is, offload some of your Bitcoin cash to gold. But if you’re very risk-tolerant and want your investments to snowball, Bitcoin will suit your needs better. Gold is more adept at safeguarding your money than making it grow.
Also, if you’re looking to gold with economic crisis skepticism, gold is undoubtedly a haven. Bitcoin may also fare as good, if not better. Bitcoin was devised on the back of the 2008 financial crisis. Like gold, Bitcoin is not tied to one country’s economy.
The only pushback against Bitcoin is it hasn’t demonstrated before how well it could weather turbulent times. Gold has past performance to show, making it a better choice between the two to hedge against sinking stock markets, inflation, geopolitical concerns, etc.
Disclaimer: The above information is for educational purposes only. We are not recommending gold over Bitcoin or vice versa. Kindly do your due diligence before investing.
How to Buy Gold with Bitcoin?
Not every gold dealer deals in Bitcoins. But the ones that do are pretty widespread and easily accessible. American Gold Exchange, APMEX, Bullion Exchanges, JM Bullion, SD Bullion, Provident Metals, and OneGold are some precious metals dealers that accept Bitcoin payments and other digital currencies.
But to buy gold with Bitcoin, you must first set up your crypto wallet.
Stocks and bonds are stored in online brokerage accounts. Similarly, Bitcoin and other cryptocurrencies get deposited in crypto wallets. These wallets generate a wallet address, a digital address comprising numbers and letters, that you would need to send and receive Bitcoin.
The following service providers offer some of the most popular wallets around:
The above wallet providers have a solid reputation and track record, offer high levels of transparency and security and facilitate seamless crypto transactions.
After zeroing in on a gold dealer and creating a Bitcoin wallet app, follow the below steps to buy gold with the cryptocurrency:
- Head to the gold dealer site and log in to your buyer account. If not already registered, sign up for one.
- Browse the offerings and add gold bars, gold bullion, gold coins, and/or any other form of gold bullion you like to your cart.
- Continue to checkout or the “send payments” screen.
- On the payment details page, choose Bitcoin from the available currency options.
- If asked to, choose your Bitcoin services provider, such as Coinbase or CoinDesk.
- Select your Bitcoin wallet. A receipt will be generated.
- Copy/paste the payment information into your wallet or simply scan the QR code to complete the purchase. You’ll receive a payment confirmation email at the end.
Use your crypto card to buy gold with Bitcoin at a physical store. More on crypto cards below.
What is a Crypto Debit Card?
A crypto debit card is like any other debit card. The only difference is its balance is denominated in cryptocurrency and not fiat money. The merchant receives fiat currency as payment when you spend on the card. Reload the card with Bitcoin when it’s low balance.
The transactions go through seamlessly as the debit cards are made in partnership with payment-processing behemoths: Visa and Mastercard. You can also withdraw traditional currency with the card at specialized Bitcoin ATMs. The U.S. has more than 33,000 such ATMs as of June 2022. Bitcoin debit cards are available at Coinbase, Wirex, Crypto, BlockFi, BitPay, Binance, etc.
Reasons to Purchase Gold with Some Bitcoin (And a Reason To Be Wary)
Unlike Bitcoin, gold is a relatively stable value store. It has demonstrated steadiness for decades, if not centuries. Bitcoin, on the other hand, is highly volatile. When you buy gold using Bitcoin, you offload some of that unpredictability. However, the question arises why buy the precious metal with Bitcoin and not through another payment method.
If you wondered too, here are some legit reasons:
Pseudonymous, Yet Transparent
When you buy anything online, you are required to submit a sheath of information to verify your identity and purchase. Also, the party receiving the payment must be duly identified for the money to go through. Although the verification mitigates crime or fraudulent transactions, someone watching over the trade (in this case, a bank) can cause insecurity.
Bitcoin isn’t anonymous. It’s pseudonymous. Real-world identities don’t get collected with Bitcoin transactions, but the level of transparency is unmatched. As Bitcoin is based on blockchain, a form of public ledger, your crypto wallet can be seen by anyone with access to the register. The time, amount, wallet information, etc., linked to the transaction is stored on the log.
As alluded to above, and contrary to general perception, Bitcoin or any cryptocurrency doesn’t lay the red carpet for criminals to carry out their nefarious acts.
Low-to-No Transaction Fees
You can pay for gold with Bitcoin to any gold dealer, irrespective of their geographic location, without incurring steep fees. The banking fees usually linked with online transactions are non-existent with Bitcoin. Even if there are fees, like Bitcoin network charges, those are likely to be minimal and few.
Traditional bank wire transfers and international purchases usually entail exchange costs and a multi-tier fee structure. Lower transaction costs could save some serious money if you’re buying gold online on a global website or at an offline store in a foreign country.
Bitcoin transactions, trading, and everything related to the cryptocurrency are done through an online payment system. You need to not visit a physical location, like a bank, to authenticate transactions or address issues that may arise related to your purchases. To buy gold using Bitcoin, you need a smartphone or computer, an internet connection, and a blockchain or Bitcoin address to receive or send payments.
Bitcoin transactions are swift (ignore the pun) and seamless. The transactions, in most cases, are almost instantaneous. There could be several reasons why Bitcoin transactions conclude so quickly.
The no intermediary or peer-to-peer setup is one big reason. The pseudonymous system eliminating the requirement for identification for both the sending and receiving parties and other unnecessary steps also lends to the speed.
Clearly, buying gold with Bitcoin has its advantages. As far as negatives are concerned, there is just one: the erraticness of the digital currency.
Not that it hasn’t been emphasized already, but Bitcoin is fickle. Therefore, buying gold or any other commodity with Bitcoin could cause disappointment if the currency’s prices go up after your gold purchase.
But since it’s tough to predict Bitcoin value and there’s always the possibility of prices going further down, as it did in 2022, it may not be advisable to postpone buying gold, hoping the currency would appreciate and you could buy more gold with the inflated value.
Read more: Getting Started with Gold ETFs
Bitcoin is not just digital money but also an investment vehicle. It could be referred to as the modern-day version of gold, which was once an acceptable form of currency and also an investment tool. Therefore, do not look at Bitcoin as just another currency to buy goods and services.
While there are other ways to conduct monetary transactions online, they aren’t purely digital currencies. Bitcoin, unlike the dollar, has no physical presence (except maybe for the crypto debit card). That makes Bitcoins secure, inexpensive, and convenient.
Diversification is key to any investment portfolio, and buying gold is one way. And if you can purchase gold using Bitcoin and save costs and fees in the process, then why not. But then don’t go overboard and keep some Bitcoin in your purse, as the crypto revolution has just begun.
Is Bitcoin the fastest for online transactions?
Although Bitcoin is speedier than most traditional forms of payment, it isn’t the quickest among its kind. Ethereum, Zcash, Dash, Litecoin, etc., are faster than Bitcoin, per this Fool.com article.