A new report issued by Goldman Sachs suggests that gold and bitcoin can potentially coexist together.
Goldman Sachs Believes Gold Isn’t Threatened By BTC
There has been a lot of speculation as of late as to whether gold can survive the coming onslaught of bitcoin price surges. As the world’s largest and most popular digital currency by market cap, the coin has garnered a newfound reputation for being a hedge tool and a “safe haven” similar with gold. The currency is looked at as something that can keep one’s wealth stable during times of economic strife.
However, many are wondering if gold is possibly losing its stamina and reputation amongst traders as the ultimate asset to own. With bitcoin now on the rise like it never has been before – the currency recently reached a new all-time high that exceeded $23,000 per unit – many traders appear to be pulling their money out of the precious metals market and putting it into bitcoin and digital currency.
This is causing many analysts and industry experts to wonder if gold’s time is limited. Will the precious metal disappear in the coming years? Will bitcoin and digital assets replace precious metals altogether, or this just a phase that investors are going through, and gold will still come out on top in the end?
According to a new report by Goldman Sachs, gold isn’t going anywhere. Sure, bitcoin is on the rise. Sure, people appear to be putting buckets of money into the digital currency, but in the long run, this isn’t anything to worry about. The company writes that the precious metal is just too cemented into people’s financial ideals, and that the asset isn’t likely to vanish anytime soon.
In a new report, strategists with Goldman Sachs explain:
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… We do not see evidence that bitcoin’s gold rally is cannibalizing gold’s bull market and we believe the two can coexist.
This document goes against everything mentioned in a recent report written by analysts of JPMorgan. That report states gold is potentially a dying market thanks to bitcoin. The digital currency is garnering far too much attention and respect from investors, who are now pulling loads of money out of the precious metals market for crypto and causing a huge dent in the gold space.
JPMorgan Says Otherwise
The report says:
The adoption of bitcoin by institutional investors has only begun, while for gold, its adoption by institutional investors is very advanced… If this medium to longer-term thesis proves right, the price of gold would suffer from a structural flow headwind over the coming years.