Gold vs Bitcoin: Diwali is one of the most popular festivals in Hinduism and is celebrated with joy throughout the country. This festival symbolizes the victory of light over darkness and reminds us that good overcomes evil and wisdom triumphs over ignorance.
For many centuries, it was believed that buying gold during these holidays would bring you good luck and ensure a prosperous future. While this belief may be true, is it wise to buy gold as an investment, or should you consider an option like bitcoin?
If history is any indicator
In this article, we will compare the past performance of bitcoin and gold to get a rough idea of how they will react during the festival of lights (Diwali) 2022.
BTC/INR jumped nearly 15% during Diwali 2021. From November 6 to 11, the price of the coin rose from $5403 to $62053. However, this was a short-term gain for bitcoin as the global market triggered a bear market.
In addition, on Diwali Day 2020, the price of BTC rose 23% in just ten days from Diwali. From November 14 to 24, the asset climbed from $1423 to $1744. Furthermore, the ongoing rally has extended to make a swing high of $3,634 by January 2021.
Taking a step back in time, in Diwali 2019, bitcoin prices experienced a sideways rally from October 27 to November 7. Although prices experienced a correction later in November, the coin price immediately recovered in the following months.
With the exception of last year’s Diwali, during which the price of an ounce of gold rose 6% from $1590 to $1684, the asset underperformed during this holiday period.
During Diwali 2020, the XAU/INR pair fell from $1714 to $1587 and recorded a 7% decline in the space of a fortnight. On the day of Diwali 2019, gold prices experienced a price consolidation, where it dropped from $1302 to $1255. However, the next bullish cycle began in late December.
In Diwali 2018, this asset presented a sharp decline from $1090 to $1029, and this fall represented a loss of 5.5% from November 7 to 30.
Buy gold or bitcoin?
Analyzing the past performance of these assets, it seems that buying gold during Diwali would not be an ideal option from an investment perspective. During the festival, this asset suffered a major loss and fell by 5-8%. On the other hand, the price of bitcoin performed surprisingly well during this Indian festival. The price of this coin recorded gains of 15-25% during Diwali.
Moreover, the price of bitcoin is trading at $19164, which is almost 70% lower than its all-time high of around $62029. Thus, interested investors can take advantage of this discounted asset to enhance their portfolio.