In a previous article, we compared how much Bitcoin and gold are worth. Today, we’ll take Bitcoin vs gold and compare the costs of storing each asset.
How Assets Can Incur Expenses
When investing, people commonly focus on how much a sum might increase or decrease in value over time. What often gets lost in the shuffle is that some investments cost you beyond losses that the initial sum might incur. For example, mutual funds include expense ratio charges; nearly all investments have tax costs; and gold and Bitcoin come with storage costs, which is what we’ll focus on in this article.
The Cost of Storing Gold
To physically own gold, you typically purchase it in either coin or bullion form, which you should then secure in some way. According to a CNBC article, the choices to store gold include a safety deposit box, a safe, or a company specializing in gold storage.
The cheapest option is a safety deposit box at a bank, which costs about $50-$200 a year. But it comes with a major drawback: Banks don’t insure gold, so you’ll need to buy insurance separately. Plus, heavy gold bricks or a large stash of coins might not fit in a safety deposit box.
A burglary-rated safe, as opposed to a safe that protects only from fire, is another choice. The cost for a quality safe can range from $750 to $11,000, according to Acme Locksmiths. Smaller safes are good for a minimal number of coins, but you’ll need a large safe, which starts around $1,200, for most gold bullion storage. Of note: Sometimes companies charge an additional tariff on safes.
The most secure way to store gold is through a depository, a company that specializes in storing precious metals in insured vaults. “Fees can range from 1/3 of 1 percent to 1.25 percent, depending on the depository and the account value,” according to CNBC. As an example, storing gold valued at $50,000 would cost $375 a year on average at International Depository Services of Delaware, formerly Diamond State Depository. Keep in mind, the rate is contingent on the value of gold at the time.
The Cost of Storing Bitcoin
Bitcoin’s status as a digital commodity rather than a physical one is a plus when it comes to storage costs, resulting in far more straightforward pricing.
Buying a Bitcoin wallet costs around $0-$200. On the free end of the spectrum, you have hot wallets, which you download from an app store, and must be connected to the internet to work. Cold wallets, on the other hand, are devices not connected to the internet that you access with a key, typically a unique string of alphanumeric characters. Cold wallets are more secure, and therefore they cost more, starting at around $80. (Learn all the details about cryptocurrency wallets here.)
Bitcoin vs Gold: Which Should I Buy and Store?
As a Bitcoin ATM company, we’re certainly biased, but you can’t deny the math: Storing gold is far pricier than storing Bitcoin, and one more component to consider if you’re debating investing in one vs the other. At the end of the day, it all depends on your investing goals. But you will end up saving much more money storing Bitcoin than you will storing gold, which should be taken into consideration when forecasting how much your assets will be worth.