Ethereum could take Bitcoin's place as a store of value through the ecosystem, Goldman Sachs analysts say.
July 7, 2021, | AtoZ Markets – In the future, ether (ETH) is able to take the place of Bitcoin in the status of a store of value. This opinion was expressed by analysts at Goldman Sachs in a recent report, writes Business Insider. According to the bank, ether has more potential than Bitcoin due to its vast ecosystem and various options for the practical use of cryptocurrency, experts say.
However, neither bitcoin nor ether will be able to overtake gold, which remains the leader among all defensive assets, according to Goldman. The bank notes that cryptocurrencies, unlike gold, are too volatile. This quality is incompatible with the concept of a safe haven asset.
“Gold competes with cryptocurrency in the same way it competes with other risky assets like stocks and cyclical goods. We view gold as a defense against inflation, and cryptocurrency as a defense against inflationary risks,” Goldman said.
Competition between cryptocurrencies also prevents them from squeezing gold in the status of a defensive asset, according to Goldman analysts. Bank of Singapore also sees volatility, low confidence, and lack of regulation as the main obstacles to the proliferation of digital assets as a store of value. However, the bank admitted that cryptocurrencies could replace gold if these problems are resolved.
See Also: Goldman Sachs Says Bitcoin Is Not an Asset Class
JPMorgan also does not exclude the possibility that Bitcoin will replace gold. Analysts believe that even a minor flow of investment from gold to Bitcoin will double or triple the value of the cryptocurrency. According to experts, in the next decade, the price of military-technical cooperation may rise significantly.
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