Goldman Sachs: “Bitcoin futures don’t get the shine of gold”

American financial company Goldman Sachs, emerging with the rise of Bitcoin, “Can it surpass gold?” He answered the question: “Bitcoin futures do not get the shine of gold.”

Bitcoin’s value reached unprecedented heights in 2017. However, Bitcoin’s market cap of $282.8 billion has not yet come close to $8.3 trillion gold.. Considering the $466.7 billion value of the cryptocurrencies market, there is still a long way to go before it reaches the gold standard. Although Bitcoin is interesting, it is unlikely to convince investors due to the diversification and hedging properties of gold throughout its long history.

Two days ago, CBOE Global Markets futures started trading. The value of the cryptocurrency, which completed its full day, exceeded $ 17,000. Considering that it started the year with a valuation of $1,000, Bitcoin’s rise is not insignificant.

However, while many see futures contracts as a way to bring Bitcoin into the mainstream, Goldman Sachs explains that it is not possible to dethrone gold and its reasons.

• First, pools of investors are ‘very different’. According to the bank, gold investors are covered by Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulations.. However, there is little clarity on how they will comply with these rules when it comes to digital currencies.
• Second, analysts say there is no obvious gold outflow from ETFs.. Goldman Sachs has announced that it supports the highest level of ETF shares since 2013.
• Third, the market characteristics of gold and cryptocurrencies are very different from each other.. Analysts claim that Bitcoin receives more speculative input than gold:

Bitcoin has a mathematically fixed amount and gold has a finite supply in the earth’s crust. The composition of demand between bitcoin and gold is the key difference.

Is digital currencies “digital gold”?

Many people have interpreted digital currencies as “digital gold”. One of them is Mike Novogratz, billionaire futures fund manager and Bitcoin supporter.. According to the former Fortress director, the digital currency market has the potential to reach $2 trillion by the end of 2018.

But analysts at Goldman Sachs say the digital currency will not distract investors from the “yellow metal”.

CCN

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