Some mainstream corporations have speculated on the potential of Bitcoin to outdo gold in the lengthy period during the crazy bull run of 2020. JPMorgan has stated in its latest study that if Bitcoin proceeds to see the institutional acceptance like it is experiencing now, gold will struggle over the near future, which has just taken place.
Nevertheless, Bitcoin and gold will exist side by side amid the biggest cryptocurrency grabbing some interest from the conventional safe haven commodity, as per Goldman Sachs Group. In a statement, the bank stated,
“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.”
Although the financial firm acknowledged that there was a substitute, they do not consider the rapid expansion of Bitcoin as an ongoing threat to the position of gold as the last resort currency.
Bitcoin transactions have risen significantly, as we mentioned, due to the digital currency’s over 210 percent rise this year 2020. In the meantime, no inflows were reported by the world’s largest gold ETF, which reported the most important outflow in the previous month. Stated Goldman,
“We do not see evidence that Bitcoin’s rally is cannibalizing gold’s bull market and believe the two can coexist.”
Dan Tapiero, co-creator of 10T Holdings, a proponent of both Bitcoin and gold, share the similar viewpoint with Goldman Sachs that traders do not have adequate value stores open. He was saying,
“Non-financial market people do not understand that we have an overall SHORTAGE of stores of value available in the markets.”
“GOLD not losing its SOV premium any time soon, unlikely in my LIFETIME.”
As per Goldman, because of “transparency issues,” rich and institutional investors ignore crypto currencies, and “speculative retail investment causes Bitcoin to act as an excessively risky asset.”
“Bitcoin is the retail inflation hedge,” as per Jeff Currie, leader of commodity analysis at Goldman Sachs.
Currie stated in an conversation with Bloomberg that it is the copper map that looks very similar to Bitcoin, and what they have which are similar is that both are “risk-on growth proxies.”
He continued that gold stays being a “defensive asset” and there is really no proof” that interest for the precious metal has not been diverted to Bitcoin.