Goldman Sachs, an American multinational investment bank and financial services company, said that Bitcoin, which is the largest cryptocurrency, is not a threat to Gold’s status. However, Sachs also added that Bitcoin might eat-up some attention given to Gold.
It is recently in this week that the value of the world’s largest cryptocurrency has gained momentum and has made touched the record value, which is above $23,000. Moreover, its year-to-date crossed 200% in just three days as the token’s price got boated by 16%.
A group of bitcoin strategists, led by Jeffrey Currie, said, “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.”
The team further mentioned that “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.”
Sachs, keeping in mind the transparency issue of cryptocurrency, has advised investors, particularly institutional investors and wealthy individuals, to refrain from using cryptocurrency. Sachs also noted these unsafe investments by retail investors that provokes “bitcoin to act as an excessively risky asset.”