By
Steve Muchoki
April 23rd, 2024
‘Bitcoin is not the new gold,’ Goldman Sachs said in the note to its clients.
Goldman Sachs revealed a note to its clients this week in which the investment bank said that bitcoin wasn’t “new gold”.
According to the note, Goldman ensures that the best way to store money is still precious metals as gold. “The use of precious metals is not a historical accident – they are still the best long-term store of value out of the known elements,” Goldman Sachs said.
By way of evidence, the investment bank informs that gold “is clearly better at holding its purchasing power, and has much lower daily volatility.”
Surely, considerable bitcoin growth this year reflects increased demand on this cryptocurrency. However, bitcoin price isn’t stable and is effected by any cryptocurrency news or expectations of world known analysts or head of states concerning bitcoin.
Bitcoin’s volatility is almost in seven times higher than volatility of gold in 2017.
Moreover, Goldman Sachs shares opinion of analysts and other international companies that digital wallets are vulnerable to hacking, and virtual currencies have “significant regulatory risks.”
That’s why China recently banned cryptocurrency exchanges and put a stop to ICOs, while some countries as Japan adopted cryptocurrency legislation system. Japan even allowed bitcoin to be used as a form of payment.
According to Goldman note, gold is unique and doesn’t have competitors. At the same time, bitcoin has rival virtual currencies. Nowadays total number of cryptocurrencies is over 1.000.
It should be noticed that crypto enthusiasts have been preparing new hard fork called “Bitcoin Gold” (BTG) that could combine bitcoin and bitcoin cash. The main project’s goal is to create a truly decentralized bitcoin by replacement of bitcoin’s original algorithm SHA256 with Equihash. This new algorithm will allow more participants to mining and will make big miners less relevant. New token of BTG project is scheduled to launch on October 25, and will trade on exchanges in November.
Bitcoin is best example of cryptocurrency, but the time will show if it becomes “save heaven” instead of gold, traditional asset.