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Your email address will not be published.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

Venezuelan International Airport Has Started To Accept Bitcoin Payments

The adoption of decentralization continues to proceed at a steady pace, and more and more countries are taking the initiative of accepting DeFi in either a legal or private approach. Recently Venezuela airport has announced to start accepting BTC payments from the passengers. This is done in a private capacity and not the state of […]

Edward Snowden: CBDC Is Not A True Cryptocurrency

There was a time when investors, traders, or even the simplest of businessmen used to do their business in gold. At the time, it was the only acceptable mode of payment on a global scale. Then the mean of economic development rolled, and we were using coins made of bronze and aluminium to preserve gold […]

Brazilian Authorities Want To Legalize Bitcoin

A breath of fresh air comes from Brazil as it makes transitions to engage with crypto-oriented payments in the next few months. According to the Brazilian federal deputy, the whole project is in motion, and there will be an outcome soon enough. On a hilarious note, he said that people would be able to buy […]

New Feature Allows Private Ethereum Transactions

When it comes to mentioning the most elegant blockchain or digital infrastructure regarding cryptocurrency, it is without a doubt that Ethereum blockchain is definitely going to get nominated for that. It is hands down the best crypto blockchain there is, which ensures complete security and efficient transfer of protocols from one network to another in […]