Bitcoin is Not an Existential Threat to Gold, Says Goldman Sachs

As many popular personalities in the traditional space and crypto world say Bitcoin would take the place of gold as a hedging instrument, investment giant Goldman Sachs disagrees with this and claims both, Bitcoin and gold, can coexist.

The financial giant does not admit that gold would lose its value in front of the top digital despite an exponential growth on the part of Bitcoin this year.

Comparison between Gold and Bitcoin

Since the creation of Bitcoin from Satoshi Nakamoto, people started comparing it with gold because of some common features such as limited supply. However, the crypto supporters now believe that there is no correlation between both assets as the flagship currency has much potential that can also undermine the top hedge assets of the world.

Multinational investment company Goldman Sachs believes that Bitcoin is not going to replace gold but rather, both can exist together and can perform their functions as hedge assets. According to Goldman Sachs:

“Gold’s recent underperformance versus real rates and the dollar has left some investors concerned that Bitcoin is replacing gold as the inflation hedge of choice. While there is some substitution occurring, we do not see Bitcoin’s rising popularity as an existential threat to gold’s status as the currency of last resort.”

However, the multinational bank admitted that “some substitution” is happening which cannot be ignored. It also explained that some big investors will not invest in Bitcoin due to “transparency issues.”

JP Morgan, one of the largest banks in the United States, is holding a different opinion on both Bitcoin and gold. Analysts at JPMorgan Chase & Co claim the world’s leading digital asset has taken away a significant portion of gold’s market cap over recent months. They claim that the market witnesses a clear movement of wealth from gold ETFs to the flagship cryptocurrency.

The analysts explained that investors are now taking Bitcoin seriously and are thinking to move money out of gold and into the digital space. And if this trend continues, the price value of gold would decrease as a result. “If this medium to longer-term thesis proves right, the price of gold would suffer from a structural headwind over the coming years,” JPM’s analyst said.

The current market position of the BTC market is very bullish as the major digital coin is trading at $22,800.

Leave a Reply

Your email address will not be published. Required fields are marked *

Related

US Congressman Proposes Bill to Regulate Cryptocurrencies and Stablecoins

There are two forces at play here, and one is a decentralized network of cryptocurrencies. On the other hand, centralized finance owned by governments, banks, and financial institutions has converged on making their own tokens to tackle it. But instead of being anonymous and decentralized, they will be highly regulated and controlled entities. Today’s new […]

Amazon Currently has No Plans to Accept Bitcoin Payments

Bitcoin mania is on the rise as bullish signals approach; Bitcoin had seen some very hard days, especially in the past few months when Elon Musk and China were cracking at it, and most of the investors lost their faith in the cryptocurrency. Bitcoin stayed closer and then below the $30K price range and was […]

New Monero Bug Violates Users’ Transactions Privacy

Monero is a privacy-focused cryptocurrency and is already getting some traction from the crypto market and investors alike. But it has been infected with the bug named “Monero,” which consistently bewilders the transaction privacy and credibility for users. The whole point of using cryptocurrency for making transactions and the use of blockchain technology is to […]

UK-based News Agency Claims Amazon is Going to Enable Cryptocurrency Payments

Amazon is the fourth-largest company in the world in terms of annual revenue generation. The retail giant was caught by a cloud of rumor mongers who connected Amazon with cryptocurrencies like Bitcoin. The root cause of the rumors was a series of job postings by Amazon that show vacancies for blockchain and digital payment experts. […]

Polkadot (DOT) Targets $17 on a Bullish Set-Up

Briefly – DOT has recovered almost 40% from its weekly lows, targeting $17. DOT’s price tries to prevent the declining wedge. The RSI overpowers a five-month trend-line. Polkadot (DOT) Price Analysis Though Polkadot (DOT) has been here for not that long, it has enjoyed massive adoption by crypto advocates. That is because of the solutions […]