By
Temitope Olatunji
April 18th, 2024
The comparison was drawn by the senior economist and market strategist at the bank – Marion Laboure.
Deutsche Bank has asserted that Bitcoin is digital gold, and also drawn comparison between Ethereum and silver. This follows after Bitcoin refused to nosedive as expected by experts following an intense regulatory crackdown in China. The investment bank updated its research materials on cryptocurrencies to reveal this.
Why Is Bitcoin Digital Gold?
The comparison was drawn by the senior economist and market strategist at the bank – Marion Laboure. She stated her perception of the world’s biggest cryptocurrencies on a new research page created.
In response to a question about ‘safe-haven assets like gold, Laboure stated that humans have always loved to store their money in assets, away from a touch of the government or authority. These haven assets have a fixed supply, and their value isn’t subject to manipulation by any nation’s central bank.
She said:
“Until recently, gold has been this primary asset. So I could envision Bitcoin to be a kind of digital gold where people can store their value as well.”
Deutsche bank became the second investment bank to make such an assertion bout Bitcoin. In January, JPMorgan strategists opined that bitcoin would start to compete with gold. They also stated that preference for digital assets may cause the acquisition of gold to be abandoned or pegged in the background. However, not much has been said about Ethereum and silver in this line.
With a market cap of $343,419,835,530, Ethereum is the second-largest cryptocurrency in the industry. However, it is favored in many quarters owing to its adoption of smart contracts.
In Laboure’s words, “Ethereum offers many applications and use cases, such as decentralized finance (DeFi) and non-fungible token (NFT). If bitcoin is sometimes called ‘digital gold’, Ethereum would then be the ‘digital silver’!”
It remains unclear whether Laboure’s position is personal or a pointer to an ongoing assessment of the crypto asset in the Deutsche Bank.
Contenders for the Digital Silver Tag
This is not the first time a cryptocurrency will be called the “digital silver”. While creating Litecoin in 2011, the founder of Litecoin, Charlie Lee, stated that he “wanted to create something that is kind of silver to bitcoin’s gold”. However, Litecoin currently ranks as 17th by market cap.
If Ethereum is to truly be accepted as the digital silver, it would need to beat off competition from rival protocols like Cardano, Binance Coin, Solana, Polkadot who all deploy smart contracts on-chain or para-chain.
It’s worthy of note that the demand for silver is not a function of its beauty but its multi-use cases. So if any of these platforms become the dominant platform for DeFi and NFTs, they could very well become the digital silver indeed.