Goldman Sachs Group Inc GS 1.35%'s CEO Lloyd Blankfein said in early October that he has "no conclusion" on bitcoin's prospect and isn't ready to endorse or reject the digital currency. The executive's personal view of bitcoin remains unknown and may not change after some of the firm's analysts released a research report comparing bitcoin's outlook to that of gold.
Precious metals like gold continue to remain a "relevant asset class" in modern portfolios despite a lack of yield, Bloomberg quoted Goldman Sachs' Jeffrey Currie and Michael Hinds as saying in a research report. In fact, precious metals continue to remain relevant despite the emergence of new asset classes like cryptocurrencies.
However, it's likely the gold versus bitcoin debate will remain ongoing for many years to come.
In gold's case, the asset class typically sees short to medium-term growth during times of uncertainties while wealth is a long-term driver. In bitcoin's case, the volatility may be too much for some investors to stomach given the price appreciation from $1,000 to start 2017 toward above the $5,000 mark. By contrast, gold is up 12 percent over the same period.
The battle of gold versus bitcoin also includes four factors, most of which gold proves to be the superior choice for investors:
- Durability: Bitcoin remains vulnerable to hacking so gold by default wins this category.
- Portability: Transferring gold can be very expensive given its weight and it is much faster and cheaper to move bitcoin.
- Intrinsic value: It is very easy to create new cryptocurrency so there is no control over supply at a macroeconomic level and zero intrinsic value due to rarity. By contrast, there is a limited supply of gold across the world.
- Unit of account: The bitcoin/dollar volatility averaged nearly seven times that of gold throughout 2017.
Benzinga does not provide investment advice. All rights reserved.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.0800 after upbeat US data
EUR/USD stays under bearish pressure and trades slightly below 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold clings to strong daily gains above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.