Source: Cointelegraph Original: "{title}"

Key Points

Both Bitcoin and gold are considered reliable stores of value. Combining the two can help balance Bitcoin's volatility with gold's stability, creating a robust financial portfolio.

Purchasing gold with Bitcoin involves selecting a reputable dealer, verifying terms, setting up a secure wallet, and ensuring transaction details are accurate to avoid irreversible mistakes.

Investors can also acquire gold-backed exchange-traded funds (ETFs) or tokenized gold using Bitcoin, providing liquidity, reducing costs, and facilitating portfolio diversification.

Using Bitcoin to buy gold typically requires tax considerations, with different tax implications in various countries. Buyers must understand local tax regulations and potential liabilities.

Bitcoin, as a decentralized digital currency, was launched after the 2008-2009 global financial crisis and has become a revolution in the international financial system, offering a borderless and censorship-resistant alternative to traditional systems. It eliminates the need for intermediaries, enabling peer-to-peer (P2P) transactions and fostering innovation in payments and remittances.

Bitcoin was launched in January 2009, but it wasn't until the end of 2011 that its price became noteworthy. On October 17, 2011, Bitcoin was valued at approximately $3. Since then, its growth has been remarkable, reaching an all-time high of over $108,000 on December 17, 2024.

The U.S. Securities and Exchange Commission (SEC) classifies most cryptocurrencies, except Bitcoin, as securities. Subsequently, in January 2024, the approval of a Bitcoin ETF helped enhance ordinary investors' trust in Bitcoin. As the most trusted cryptocurrency, Bitcoin has proven its potential as a means to purchase valuable assets like gold.

The growing interest in using Bitcoin to purchase physical assets like gold indicates its recognition as a viable medium of exchange. High-net-worth individuals increasingly view Bitcoin and gold as complementary assets in their portfolios.

This article discusses the various advantages of purchasing gold with Bitcoin, the complete transaction process, the aspects of buying gold ETFs with Bitcoin, and related tax issues.

Why Buy Gold with Bitcoin?

Bitcoin and gold share a commonality: both are reliable stores of value. Bitcoin is a digital asset that has experienced significant price volatility over time, while gold has a long history of retaining value across various economic cycles. Including both Bitcoin and gold in a portfolio can strengthen your financial strategy.

Using Bitcoin to purchase gold allows you to diversify your wealth without converting to cash, helping you avoid high conversion fees and providing a faster, more efficient trading experience.

Gold, as a stable store of value for centuries, typically exhibits less volatility than Bitcoin, helping to balance Bitcoin's price fluctuations. Combining these two assets can create a comprehensive market risk hedge, providing stability and growth potential for your portfolio.

As of 2024, gold remains the preferred safe-haven asset, while Bitcoin's rise has made it a popular digital asset for long-term investment.

Buying gold with Bitcoin bridges the gap between modern and traditional assets, enhancing the flexibility of wealth management. You can hold high-value decentralized assets while leveraging gold's long-term value. This synergy makes purchasing gold with Bitcoin a strategic, forward-looking financial diversification strategy.

Did you know? While you can buy gold with Bitcoin, research by Baur and Hoang (2021) indicates that any direct correlation between Bitcoin and gold is statistically insignificant or close to zero.

Steps to Buy Gold with Bitcoin

Purchasing gold with Bitcoin involves a series of steps:

Step 1: Research Reputable Gold Dealers

First, identify reputable gold dealers that accept Bitcoin as a payment method. To ensure their reliability, check customer reviews, certifications, and the security measures they implement.

Explore the dealer's inventory and choose the gold products that best suit your needs. Dealers typically offer gold bars, coins, and gold rounds. Gold bars are rectangular blocks of gold, often used for large-scale investments due to their weight and high purity, typically ranging from 1 gram to several kilograms.

Coins are government-minted legal tender made of gold, usually smaller in size, featuring unique designs and denominations. They are popular for investment and collection purposes and often carry a higher premium than their gold content.

On the other hand, gold rounds are privately minted, resembling coins in shape and design but lacking legal tender status. They are typically cheaper than coins because they lack collectible and legal tender characteristics, making them an economical choice for investing in gold.

Carefully compare options based on weight, purity, and dealer fees to maximize your Bitcoin value.

Step 2: Verify Supplier Terms

Review the dealer's policies regarding pricing, delivery, and refunds. Consider the dynamic exchange rate from Bitcoin to gold, as cryptocurrency prices can fluctuate.

Step 3: Set Up a Bitcoin Wallet

If you don't have one, create a secure Bitcoin wallet. You can create one on cryptocurrency exchanges like Binance or choose a self-custody software wallet like Trust Wallet to facilitate the purchase of gold.

If you hold a significant amount of Bitcoin, consider using a hardware wallet for secure storage and transferring a portion to a software wallet for purchasing gold.

Step 4: Place an Order

Typically, paying for gold with Bitcoin involves sending Bitcoin to the seller's wallet address. This example uses Binance Wallet to demonstrate the process of sending Bitcoin.

Log in and click the "Withdraw" icon in the "Overview" tab.

In the search list, enter Bitcoin.

Click "Bitcoin." Copy and paste the address from the seller's invoice, select the network, and enter the withdrawal amount. The choice of network depends on whether the merchant prefers to receive payment in a Bitcoin wallet or a Lightning Network address.

Click "Withdraw" and confirm the payment.

The seller usually receives the payment after three confirmations on the Bitcoin blockchain. The Lightning Network protocol helps facilitate faster and cheaper transactions on the Bitcoin blockchain.

When making a payment, it is crucial to carefully check the wallet address and transaction details to avoid errors, as cryptocurrency transactions are irreversible.

If you want to avoid potential errors when copying the address, you can use QR code payment. To scan the QR code, click the icon on the far right of the "Address/Invoice" field, scan the QR code on the invoice, and complete the transaction.

Keep the transaction ID as proof of payment.

Step 5: Secure Delivery and Storage

Dealers may offer you the option of physical delivery or secure vault storage. Vault storage facilities provide a protected and controlled environment for the safe storage of valuable physical assets.

After receiving payment, the dealer will send the physical gold to your address or deposit it in a vault for secure custody on your behalf.

Did you know? As of March 16, 2025, nearly 19.84 million Bitcoins are in circulation, with a market value of $1.65 trillion.

Can You Buy Gold ETFs with Bitcoin?

Gold ETFs are financial products that track the price of gold, allowing investors to gain exposure to the commodity without owning the physical asset. Gold ETFs attract investors due to their liquidity, convenience of trading on stock exchanges, and ability to diversify portfolios without the need for secure storage.

Traditionally, investors purchase gold ETFs using fiat currency. However, it is now possible to buy gold-backed ETFs with Bitcoin. For those looking to invest in gold without actually owning it, gold ETFs are a popular choice, offering convenience and liquidity.

There are several advantages to purchasing ETFs with Bitcoin:

Accessibility: On cryptocurrency exchanges, you can buy gold ETFs with Bitcoin just as you can purchase physical gold with Bitcoin.

Speed: Bitcoin transactions are typically faster than traditional international banking methods, which can take several days.

Global Reach: Regardless of geographical location, you can use Bitcoin to invest in gold ETFs from anywhere in the world.

More Affordable: Acquiring gold ETFs with Bitcoin may be less costly than using traditional methods.

Portfolio Balancing: If you want to add stable assets to your portfolio, gold ETFs may be an ideal choice.

Before purchasing gold ETFs, ensure that the platform you choose is trustworthy, has clear pricing policies, and accurate Bitcoin to ETF conversion rates. This ensures a smooth transaction and helps you avoid hidden fees when investing.

Did you know? Examples of gold ETFs include iShares Gold Trust (IAU), SPDR Gold MiniShares Trust (GLDM), Aberdeen Physical Gold Shares ETF (SGOL), and iShares Gold Trust Micro ETF of Beneficial Interest (IAUM).

Can Gold Be Tokenized and Paid for with Bitcoin?

Yes, gold can be tokenized and paid for with Bitcoin. Tokenized gold represents real ownership of gold on the blockchain, with each token backed by a certain amount of physical gold. Tokenized gold allows you to acquire gold in a digital, divisible, and tradable form.

Purchasing gold-backed tokens with Bitcoin offers various benefits. It combines the reliability of gold with the transparency and efficiency of blockchain technology. Transactions are quick and secure, eliminating the need for fiat currency conversion and additional fees. Moreover, gold tokens have high liquidity, allowing you to easily transfer or trade them, making them a versatile investment alternative.

Tokenized gold provides Bitcoin holders with a direct way to diversify their portfolios, hedge against cryptocurrency volatility, and gain access to gold's timeless value, all without leaving the crypto ecosystem.

For example, Tether Gold (XAUT) digitizes physical gold ownership on the blockchain, combining the advantages of cryptocurrency with the stability of gold. Additionally, Tether's Alloy (AUSDt) is a stablecoin backed by Tether Gold, tracking the U.S. dollar while anchoring reliable gold reserves.

Tax Implications of Buying Gold with Bitcoin

Using Bitcoin to purchase gold will have different tax implications in various jurisdictions:

United States: The IRS treats cryptocurrency as property. It considers using Bitcoin to buy gold a taxable event, potentially subjecting the difference between the purchase price and sale price to capital gains tax.

United Kingdom: HMRC categorizes crypto tax into two types: capital gains tax and income tax. Depending on thresholds, exchanging Bitcoin for gold may result in taxes under these categories.

Germany: Germany taxes crypto gains and income at your personal income tax rate, ranging from 0% to 45%.

Singapore: Singapore does not impose capital gains tax on individuals not engaged in professional crypto trading. However, an 8% Goods and Services Tax (GST) applies to fees incurred during crypto transactions.

Japan: Cryptocurrency profits in Japan are taxed as income, including national income tax and a 10% resident tax, resulting in an effective tax rate between 15% and 55%.

Risks of Buying Gold with Bitcoin

Purchasing gold with Bitcoin involves several risks. First, price volatility is a challenge, as Bitcoin's value may unexpectedly fluctuate, leading to unfavorable exchange rates during transactions and eroding tax profits.

Tax liabilities may also arise, as jurisdictions may view such transactions as taxable events, resulting in capital gains or income tax. Depending on your location, you need to consider regulatory issues before engaging in such transactions.

Dealing with unverified gold suppliers exposes you to counterparty risk, leading to fraud. Additionally, Bitcoin transactions are irreversible, and any mistakes could result in the loss of funds. This leaves no room for error. Before conducting transactions to purchase gold with Bitcoin, it is essential to verify the seller's legitimacy, familiarize yourself with local regulations, and assess current market conditions.

Related: How to Solve Bitcoin Transaction Bottlenecks in 2025: A Step-by-Step Guide

This article does not contain investment advice or recommendations. Every investment and trading activity involves risks, and readers should conduct their own research when making decisions.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。