Is Bitcoin better than gold?

Bitcoin is changing the perspectives of investors. But would you be willing to swap some cryptocurrency for a valuable guitar collection or a chunk of gold?

a woman

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It was in 1971 when Led Zepplin's Jimmy Page strapped on a cumbersome double-neck Gibson guitar and Robert Plant sung the iconic line "all that glitters is gold".

Back in the early 70s it was a different world.

An ounce of gold was going for about US$45 and you could get your hands on a second hand Gibson Les Paul from 1960 for less than US$200 – if you shopped around at a time when few imagined a guitar could be a serious investment.

And Bitcoin was nothing to anyone unless they mistakenly thought it was a reference to a fragment of a penny.

Today, an ounce of gold will set you back about US$1,288 but you can expect to pay far more than US$150,000 for the right example of a 1960 Les Paul.

While gold has gone up by more than 2,700%, a 1960 Les Paul has often provided returns that exceed 74,000%.

It's been a while now since investors and media have recognised the investment potential of an electric guitar with Reuters and Forbes among numerous outlets offering advice and information on the topic for more than a decade.

Clearly, the lady who was sure that all that glittered was gold has been proven wrong.

Fast forward four decades and enter Bitcoin.

In an ad posted recently on Gumtree a West Australian man is betting a Gibson guitar collection on Bitcoin.

It seems he was trying to trade three Gibson guitars, two Les Pauls and an ES-335, for one Bitcoin.

Though obviously there was no 1960 Les Paul among them, still, it makes me wonder.

For astute investors in musical instruments, as seen above, the returns can certainly eclipse the traditional safe haven of gold.

As such, guitars have often proved much better investments than the precious metal.

So, I was a bit startled when I noticed the ad which sought to trade a single Bitcoin for three valuable guitars.

Ads are popping up all over the place where people are willing to offer goods and services for Bitcoin, adding greater legitimacy to the cryptocurrency.

But it's the first time I've seen someone attempting to trade a valuable guitar collection, which looks like it would provide a solid return over a long enough period.

And as we've seen, a good guitar can be better than gold.

However unlikely it is that Gibson guitar owners will experience the returns they have seen over the last few decades, it is likely that the right guitars will prove a better investment than gold.

Does this mean Bitcoin is better than gold?

Well, it seems some people think the answer to that question is yes.

And if some analysts, who are tipping Bitcoin to hit US$100,000 in the next 10 years, are proven right then Bitcoin would smash the potential returns offered by gold, if historical prices are anything to go by.

Still, it makes me wonder.

Motley Fool contributor Steve Holland has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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