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Goldman Sachs has said that digital currencies are not the ‘new gold’ despite claims that it is considering launching a bitcoin trading operation.
In a note to clients, the multinational finance company said that despite the popularity of cryptocurrencies, gold is the ‘best long-term store of value,’ reports CNBC.
The note said:
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.
Gold wins out over cryptocurrencies in a majority of the key characteristics of money.
According to the bank, digital wallets where investors hold their coins are vulnerable to hacking. Additionally, bitcoin has rivals in digital currencies such as ethereum, monero and dash, whereas gold doesn’t have alternative competitors, Goldman Sachs said.
The bank also claims that gold ‘is clearly better at holding its purchasing power, and has much lower daily volatility.’
These comments come at a time when Goldman Sachs has said that it is considering launching a bitcoin trading operation. Earlier this month, it was reported that the bank was in the early stages of planning an entry into the cryptocurrency market. Such a move would make it the first major Wall Street bank to get involved with bitcoin and other digital currencies.
However, Lloyd Blankfein, CEO of Goldman Sachs, is still sitting on the fence as he’s yet to reach a point where he’ll endorse or reject the digital currency. According to the CEO, he’s ‘still thinking about bitcoin.’ Yet, while this is the case, the bank has admitted that cryptocurrencies are getting ‘harder to ignore.’
That’s certainly the case with current trading prices. The market has recently experienced a surge in trading with bitcoin currently valued over $5,700. Yet, despite this critics remain. Most notably, Jamie Dimon, CEO of JPMorgan Chase, who has called bitcoin ‘a fraud,’ in the past, claiming that it’s ‘worth nothing.’
Featured image from Shutterstock.