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Goldman Sachs Says Gold Is Better Than Bitcoin

Gold wins out over cryptocurrencies when assessed on the majority of the key characteristics of money, according to Goldman Sachs Group Inc., which adds that fear and wealth are the core drivers of bullion.

“Precious metals remain a relevant asset class in modern portfolios, despite their lack of yield,” analysts including Jeffrey Currie and Michael Hinds wrote. “They are neither a historic accident or a relic.” Looking at properties such as durability and intrinsic value, they are still relevant even with new materials discovered and new assets emerging, such as cryptocurrencies, they said.

Investors boost the amount of gold in their portfolio as uncertainty increases, making fear the key medium to short-run driver, Goldman said. Wealth is the long-term driver, especially in emerging markets such as China, where growing income levels over the next few decades will support prices, it said in a report.

Bitcoin has put in a phenomenal performance this year, soaring toward $6,000 after starting the year around $1,000. In contrast, gold is up 12 percent. The bank listed several characteristics to compare them, adding that it’s focusing on the currency, not the blockchain technology. They include:

  • Durability: While both require expertise for correct long-term storage, gold wins because cryptocurrencies are vulnerable to hacking through online wallets or the user’s computer or smartphone, are subject to regulatory risk, and network and infrastructure risk during a crisis.

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MARKET SUMMARY

INDICES

Name Last Change
DOW 23358.20 0.43%
S&P 500 2578.85 0.26%
NASDAQ 6782.79 0.15%
TSX 15998.57 0.40%
TSX-V 799.35 0.00%

Resource Commodities

Name Last Change
Gold 1292.66 0.12%
Silver 17.23 0.46%
Copper 3.06 0.62%
Platinum 952.00 1.56%
Oil 56.55 2.49%
Natural Gas 3.10 1.42%
Uranium 24.25 N/A
Zinc 1.45 0.00%

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