Nouriel Roubini, an American analyst and a crypto critic, states that Bitcoin will never be equivalent to physical gold. All this dream of Bitcoin becoming digital gold is a detached perception because it is less likely to happen anytime soon or ever. In a fair understanding or assumption, if Bitcoin is to become the digital gold like other investors or influential parties say is about to happen, then it must buy or have access to the physical gold out there. This is not an easy feat by any means, as multiple institutions of the world have already been amassing gold, and they will continue to do so as their token against inflation.
Bitcoin, according to Roubini, has no utility and lacks the practical use cases like gold; anyway, the price volatility alone is enough to eliminate the possibility of Bitcoin working as a central currency or a digital value that can be used for trade, and it will definitely knock the trading system off balance. On the other hand, gold has proven its value and worth time and again in situations like inflation and market collapse that it can serve as the right set of a commodity to get by the hard times.
Bitcoin is far from Becoming Digital Gold due to its Own Shortcomings
The questions that Roubini has around Bitcoin can’t just be neglected with a simple jolt of the neck; where does price regulation kick in for bitcoin? What is the fundamental value of the cryptocurrency, and to state a few facts, it doesn’t even have a payment system nor any users to back up its play? For other assets out there to qualify as a means of payment and exchange, their fundamental values have to be sorted and assigned, but in the case of Bitcoin, it doesn’t seem to be happening, and due to this very simple yet plain reason, it can’t be the digital gold.
On the other hand, he also had to add that the CBDCs or the central bank digital currencies would eventually wipe out the concept of cryptocurrencies as these serve the same as a digital currency would have, having assigned the value and amount of the fiat money existing in a digital form. But that doesn’t chip in the decentralization of things at all, the very reason why the cryptocurrency is active and kicking these days.