Preserve Gold Explains Why Digital Assets Carry Risks While Gold Endures
Digital assets have gone mainstream over the last decade. Since the introduction of Bitcoin—the first-ever cryptocurrency—in 2009, there has been an explosion in digital asset creation and trading. These assets include other blockchain-based cryptocurrencies, security tokens, NFTs, and central bank digital currencies. These all have implied value, are discoverable, and can be traded or exchanged.
While these assets, particularly cryptocurrencies, have growth potential, they’re also inherently risky. Digital assets are relatively new and—while regulation is advancing—they’re still associated with safety and security risks. Their price volatility may be attractive to investors seeking quick gains, but they’re not reliable long-term stores of wealth like gold, a finite resource that has had perceived value for thousands of years from ancient civilizations to modern times. In fact, the price of gold exceeded $5,000 for the first time in January 2026.
The Volatility of Digital Assets
“Digital assets, and especially crypto-assets, have major risks that are well understood,” said senior fellow Tim Lane of the Centre for International Governance Innovation (CIGI) in his July 2025 paper “Digital Assets and the Potential for Global Systemic Risk.” “These risks stem primarily from the inherent volatility of their value, as their inflexible supply meets rapidly shifting demands from investors. Indeed, that volatility is what has attracted many investors.”
Most crypto investors take advantage of the asset’s volatility to capitalize on wild price swings for short-term gains. This volatility is driven by investor sentiment, as well as government regulations, media coverage, and supply and demand. Bitcoin, for example, has gone from 10 cents per token in October 2010 to an all-time high of $126,198.07 by October 6, 2025. Its price dramatically increased and decreased many times between those periods, including a dip from $67,549 on November 8, 2021 to $46,709 by mid-December 2021.
The rise of Bitcoin prompted the creation of many other cryptocurrencies, known as altcoins. These are generally even more volatile.
Market Risks
There’s risk with every investment. The price of gold has fluctuated over time and is typically more valuable during periods of geopolitical instability, hence its reputation as a safe-haven asset. However, it isn’t exposed to the same market and security risks as digital assets.
Digital assets are relatively new. Unlike gold or fiat currencies, they don’t have an extensive track record, making it more difficult to predict performance in various market conditions. Their novelty also contributes to their volatility, and altcoins or lesser-known digital assets that are lightly traded can be easy to manipulate and hard to sell. Investors also need to be cautious about run risk for cryptocurrencies. This occurs when a significant number of owners of a certain crypto panic and sell, which in turn could leave some with worthless coins.
Crypto Poses Fraud and Cybersecurity Concerns
Trading digital assets also poses substantial fraud and cybersecurity risks. When you purchase gold with the help of Preserve Gold, you can choose to take ownership of an actual bar of gold or have the asset transferred to a Precious Metals IRA with tax advantages. Because digital assets are still relatively new and confusing to many, they’re a popular vehicle for scams. Criminals can create fraudulent crypto campaigns or platforms, manipulating you to invest more or outright defraud you of your coins.
Moreover, crypto tokens are stored in private digital wallets. These are secured with an encrypted key, but if this is obtained by another party you’re at risk of losing all of your assets in the wallet. Wallets and trading accounts are also susceptible to hacker and phishing attacks.
Environmental Impact of Crypto Mining
In addition, mining gold is much more environmentally friendly than Bitcoin mining—the process of verifying transactions on the blockchain. Verifying one Bitcoin transaction takes about as much electricity as an average household uses in roughly one month. According to the Bitcoin Energy Consumption Index, 204.44 terawatt-hours (TWh) of electrical energy per year is required to mine Bitcoins, while only 132 TWh of electricity is needed to mine gold each year. Gold also has a significantly smaller carbon footprint, at 30 tonnes of emissions for every Bitcoin worth of gold compared to 691 tonnes for every mined Bitcoin. So, even ignoring security, market, and fraud risks, if you’re concerned about the environment, gold is a much greener investment option.
Gold As a Long-Term Store of Wealth
New digital assets can be created and central banks can increase their money supply by purchasing bonds. The increased supply often leads to a decline in value. This isn’t a concern with gold. The limited resource has had an inherent value since its discovery and has been used as currency to facilitate trade and more recently as a store of wealth.
Gold cannot be destroyed and is typically most valuable during periods of economic instability, making it a great asset to hold and sell in a recovery period. Gold’s investment purchasing power increased 15- to over 20-fold during the 1970s.
The Bigger Picture
Digital assets have introduced new opportunities and innovation within the financial system, but they also come with unique risks tied to volatility, security, and market maturity.
Gold, by contrast, has maintained its role as a finite, tangible asset that has preserved value across centuries of economic cycles, geopolitical conflicts, and shifting monetary systems.
While both asset classes may have a place in a diversified portfolio, gold’s long-standing track record continues to make it a consideration for investors focused on stability and long-term wealth preservation.
