Bitcoin’s popularity won’t threaten gold’s “currency of last resort” status

TL;DR Breakdown:

• Goldman Sach said Bitcoin’s popularity wouldn’t be a threat to gold’s long-standing status as the preferred asset for an inflation hedge.
• The bank opined that both the crypto and gold can still coexist.

Retail and institutional interest in Bitcoin (BTC), the leading crypto by market valuation, has been on the rise since this year. One major factor pushing Bitcoin’s popularity is price performance. It’s said the cryptocurrency one of the best-performing assets, and it has gained more than 170 percent in value in January. 

Despite the rapidly increasing popularity of the cryptocurrency, the United States investment bank, Goldman Sachs, said the crypto isn’t going to threaten gold’s long-believed status as the “currency of last resort.”

Bitcoin’s popularity isn’t a threat to gold

The US investment said the cryptocurrency has been pinching demand from the precious metal amid its growing awareness. However, Bitcoin’s popularity doesn’t come as a threat to the outlook of gold as the oldest of havens, the “precious metal’s standing will endure,” Goldman added. Some investors holding the yellow metal are getting worried that the cryptocurrency will eventually replace gold as the most preferred asset to hedge against inflation.

This is caused by the recent underperformance compared to the real rates and the United States dollar, according to the bank. 

“While there is some substitution occurring, we do not see Bitcoin’s rising popularity as an existential threat to gold’s status as the currency of last resort,” Goldman added. “We do not see evidence that Bitcoin’s rally is cannibalizing gold’s bull market and believe the two can coexist.”

Bitcoin still peaking

Bitcoin’s popularity and awareness keep increasing with every bullish run it makes. As the cryptocurrency broke the $20,000 resistance on Wednesday, it ranked as the most tweeted topic on Twitter. Also, Bitcoin search on Google has increased since September, showing a growing interest in the cryptocurrency around the globe.

At the time of writing, Bitcoin is trading at the price of $22,998 on Coinmarketcap.