Bitcoin’s price is continuing to flirt around the $23,000 mark — prompting enthusiasts to claim that crypto is about to overtake gold as the ultimate safe haven asset.
But although the precious metal has been underperforming recently, Goldman Sachs isn’t convinced that BTC is going to steal gold’s lunch money. According to Bloomberg, the investment bank’s analysts said:
“We do not see Bitcoin’s rising popularity as an existential threat to gold’s status as the currency of last resort.”
Goldman Sachs even went on to say that it believes gold and Bitcoin can co-exist, with the world’s biggest cryptocurrency serving investors who have a bigger appetite for risk.
It comes after JPMorgan suggested that funds are going to be flowing out of gold for years as institutional investors begin to gain exposure to crypto in a more meaningful way. Strategists at the investment bank had said:
“The adoption of Bitcoin by institutional investors has only begun, while for gold its adoption by institutional investors is very advanced.”
Why This News Matters
In a way, it seems like Goldman Sachs is pouring cold water on the idea that BTC has the potential to threaten gold’s standing in the market.
Some crypto entrepreneurs, such as the Winklevoss twins, have argued that there is a case for Bitcoin hitting $500,000 because of how it is a better store of value than gold. Whereas BTC is portable, divisible and has a fixed supply, gold is expensive to store and sold by the ounce — and it’s difficult to know how much of it is left to discover (especially considering what could be in space.)
Time will tell whether their argument carries any weight, but do remember that Bitcoin has a long way to go before its market cap is anywhere near gold’s.
At the time of writing, BTC has a market cap of about $425 billion — while gold is streets ahead on $9 trillion.
Read More on Alexandria!
There’s plenty more to read on Alexandria, including this piece on the nine things you should know before investing in cryptocurrency.
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