# Is it time to get off the cyber investment train?
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2018-01-20
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Fintech vs Gold: Which is the Better Investment?
Meta Description: Discover the potential of finite investments like gold coins, property, and jewellery compared to the ever-changing world of fintech. Find out more at
URL: https://financedigest.com/is-it-time-to-get-off-the-cyber-investment-trainhtml

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With Fintech thriving and more than $1bin (£760m) already been ploughed into technology firms by venture capital investors hoping to disrupt finance this year (more than double the amount this time last year)\[1\] fintech continues to look strong as a market for investors. However, is our love of all things new and shiny making us forget some of those investments that have stood the test of time?

![Daniel Marburge](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/daniel-marburge-194x300-1736843058349-compressed.jpg)

Daniel Marburge

Daniel Marburger, Director of [www.coininvest.com](http://www.coininvest.com/), questions whether investing in virtual reality is really the future and whether those who are continuing to invest in those assets with a finite supply – eg. gold coins, property, jewellery – are the ones who will be laughing all the way to the bank?

We all know that [technology has changed our lives](https://www.financedigest.com/how-technology-has-changed-our-lives.html "How Technology has Changed Our Lives") forever. From waking up in the morning and reaching for our phones to find out the global news, to checking the stock price before we hit the pillow, technology has driven accessibility and information to the masses.

The [world of finance too has been changed beyond recognition with fintech start-ups popping up every day](https://www.financedigest.com/covid-war-and-fed-push-world-stocks-down-for-4th-day.html "COVID, War and Fed push world stocks down for 4th day"). The [recent Global FinTech Report](https://www.financedigest.com/according-to-the-recently-published-report-by-persistence-market-research-the-global-market-for-gene-expression-analysis-will-reflect-a-steady-growth-during-the-forecast-period-2017-2022-by-the-end.html "According to the recently-published report by Persistence Market Research, the global market for gene expression analysis will reflect a steady growth during the forecast period, 2017-2022. By the end of 2022") by PWC claims that 82% of incumbents expect to increase FinTech partnerships in the next 3-5 years and there is a 20% expected annual ROI on FinTech related projects\[2\].

However, just stop for a minute. Let’s get off this tech roundabout and switch off the Internet for one moment.

We are already seeing a movement that is rejecting tech. With [Artificial Intelligence](https://www.financedigest.com/types-of-artificial-intelligence.html "Artificial Intelligence") becoming more and more integral to our daily lives and tech platforms such as Facebook overtaking their original purpose of a social media network to become the biggest surveillance company in the world, having now passed the 2bn user mark, how much longer will we be in love with tech? And will these cyber investments continue to be in [demand and retain their value](https://www.financedigest.com/analgesics-market-value-surpasses-us-77-3-bn-as-demand-for-nsaids-rise-at-4-1-fmi.html "Analgesics Market Value Surpasses US$ 77.3 Bn as Demand for NSAID’s Rise at 4.1%: FMI")?

**Finite v infinite investments**

Fintech exploded officially in 2008 with [global investment](https://www.financedigest.com/impact-com-announces-huge-investment-in-workforce-with-raft-of-new-hires-globally.html "impact.com announces huge investment in workforce with raft of new hires globally") increasing more than twelvefold from $ 930 million in 2008 to more than $ 12billion in 2014.\[3\] That’s not bad going in terms of a ROI.  However, let’s compare a finite [investment such as gold and precious metals](https://www.financedigest.com/how-to-invest-in-gold-and-other-precious-metals-for-long-term-profit.html "How to invest in gold and other precious metals for long-term profit").  Comparing the price of gold to 16 years ago, investors will have seen a 400% return on investment, 10-fold the return from a FTSE 100 investment and a staggering increase compared to the 20% [expected fintech yield](https://www.financedigest.com/german-bond-yields-at-new-highs-after-stronger-than-expected-pmis.html "German bond yields at new highs after stronger-than-expected PMIs") quoted by PWC. In addition, British gold [investment](https://www.financedigest.com/a-gold-ira-can-protect-your-retirement-investment.html "A Gold IRA Can Protect Your Retirement Investment") coins such as the Gold Sovereign and the Gold Britannia have legal tender status and therefore they are exempt from VAT and Capital Gains Tax.

The [price of gold continues to be robust with US Gold Futures for delivery in December 2017 trading](https://www.financedigest.com/euro-zone-posts-record-trade-deficit-in-august-amid-soaring-energy-prices.html "Euro zone posts record trade deficit in August amid soaring energy prices") at $1291,50 which is an increase of 12,5% year to date.

There’s more good news. The golden halo continues to shine with the [next 16 years](https://www.financedigest.com/global-crypto-regulation-body-likely-in-next-year-top-official-says.html "Global crypto regulation body likely in next year, top official says") looking strong. Gold is a finite investment meaning that there is a maximum amount that can be sold, so if demand continues as it is, then the price will [rise as demand outperforms the supply](https://www.financedigest.com/all-terrain-vehicle-market-demand-supply-growth-factors-latest-rising-trend-and-forecast-to-2027.html "All-Terrain Vehicle Market Demand, Supply, Growth Factors, Latest Rising Trend and Forecast to 2027").

**[Future Proofing:](https://www.financedigest.com/4-ways-todays-investor-can-future-proof-their-assets.html "4 Ways Today’s Investor Can Future Proof their Assets") gold and Bitcoin**

These returns on investment have been noted by those savvy enough to look beyond the allure of the new. Those who invested in bitcoin only to have [traded this currency](https://www.financedigest.com/forex-trading-how-to-trade-currencies-for-profit.html "Forex Trading: How to Trade Currencies for Profit") into cash and back to gold to maximise their investment have seen a ten-fold between when bitcoin started its crazy ride from GBP 1,000 in May 2017 to its high of GBP 6,063.17 at present.

Link: [https://www.coingecko.com/en/price\_charts/bitcoin/gbp](https://www.coingecko.com/en/price_charts/bitcoin/gbp)

Although no longer a daily transactional commodity, there is reason why gold remains integral to the [global economy](https://www.financedigest.com/imfs-georgieva-sees-darkening-outlook-for-global-economy-rising-recession-risks.html "IMF’s Georgieva sees ‘darkening’ outlook for global economy, rising recession risks"). Take a look at the reserve balance sheets of the largest financial organisations and [central banks](https://www.financedigest.com/marketmind-rba-shock-hike-starts-huge-week-for-central-banks.html "Marketmind: RBA shock hike starts huge week for central banks"), and you will see that they hold about 20% of the world’s supply of mined gold.

[Investors of all levels are attracted to gold](https://www.financedigest.com/gold-investors-face-bind-over-bars-from-tarnished-russia.html "Gold investors face bind over bars from tarnished Russia") because of its unique properties as an asset class. The [precious metal](https://www.financedigest.com/best-paying-jobs-in-precious-metals.html "Best paying jobs in precious metals") is a solid, tangible and long-term store of value that historically, has moved independently of other assets. Indeed, custodians of the world’s largest [investment portfolios](https://www.financedigest.com/investment-portfolio-diversification-why-its-important-and-how-to-do-it.html "Investment Portfolio Diversification: Why It’s Important and How to Do It"), use gold to mitigate portfolio risk and have been net buyers of the precious metal since 2010.

Gold is a highly effective vehicle of diversification and [risk management](https://www.financedigest.com/extended-reality-applications-in-risk-management.html "Extended Reality Applications in Risk Management") because it is independent from other asset classes. Gold [enhances portfolio performance](https://www.financedigest.com/three-fundamental-tips-to-enhance-your-investment-portfolio-performance.html "Three fundamental tips to enhance your investment portfolio performance") while reducing losses in times of economic turmoil. For example, during periods of financial uncertainty when equity indices [fall sharply](https://www.financedigest.com/euro-zone-industry-output-falls-sharply-with-ireland-plunge.html "Euro zone industry output falls sharply, with Ireland plunge") and volatility increases, gold’s volatility remains much lower than that of equities. In general, therefore, it consistently exhibits low to negative correlation with mainstream assets as well as alternative asset classes. [Economic growth boosts demand](https://www.financedigest.com/switch-from-gas-boosts-oil-demand-but-economic-headwinds-loom-iea.html "Switch from gas boosts oil demand, but economic headwinds loom – IEA") for gold in the form of jewellery while recessions promote buying the precious metal as a share of value. It is this balance that drives gold’s lack of correlation to other assets and enhances its appeal of part of an [investment portfolio](https://www.financedigest.com/heineken-to-invest-300-million-in-brazil-to-expand-premium-beer-portfolio.html "Heineken to invest 0 million in Brazil to expand premium beer portfolio").

This validation that gold preserves wealth even in fluctuating economic markets is even more relevant when investors are faced with a declining US dollar and [rising inflation](https://www.financedigest.com/ftse-100-ends-lower-as-pound-jumps-after-inflation-rises-further-in-june.html "FTSE 100 ends lower as pound jumps after inflation rises further in June"), where gold typically inflates in price.  Historically used as a hedge against both these scenarios, [investors traditionally will turn](https://www.financedigest.com/analysis-oil-prices-turn-more-volatile-as-investors-exit-the-market.html "Analysis-Oil prices turn more volatile as investors exit the market") to a hard asset to maintain their values.

As with any new toy, we often get our head turned forgetting those things that we held dear to us previously. However, maybe the time is coming for us to realise that those things that have weathered the test of time have done so as they have [real value and are ones that will always remain a safe and robust investment](https://www.financedigest.com/investing-in-real-estate-how-to-generate-passive-income.html "Investing in Real Estate: How to generate passive income").


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