While bitcoin investors think that the Lighting Network (the multi-layer scaling solutions) would transform BTC into a suitable payment system similar to purchasing the proverbial coffee. However, most of them are arguing on the short term of the cryptocurrency “digital gold.” Nevertheless, an equity analyst from a well-known investment research firm declared that bitcoin has not the potential to affect the market share of gold.
Bitcoin Won’t Steal Yellow Metal’s Shine
The “Morningstar Minute” equity analyst Kristoffer Inton declared that if Bitcoin ever steals gold’s shine, then it will be a major “seismic shift” in the investments case. Almost 40% of gold demand is received from the investors.
“If cryptocurrencies were to displace gold’s investment case, the implications for gold prices would be devastating. 40% of gold demand relates to investment, so a shift in investment from gold to cryptocurrency would be a seismic shock.
Anyhow, Kristoffer Inton has been part of the Morningstar team from 2013, wrote that the company made a proprietary framework to evaluate assets of value. He found that cryptocurrency is not a good match for this rubric. So, decided to recommend long-term investments in particular gold stocks, as Goldcorp.
“In order to assess the threat, we’ve created a framework to grade any asset class’s viability as a safe haven by focusing on liquidity, functional purpose, scarcity of supply, future demand certainty, and permanence. Through this framework, we conclude that cryptocurrency does not and will challenge gold as a safe-haven asset class.”
However, some cryptocurrency bulls say that bitcoin has a solid investment thesis, like “digital gold. All, because it is still volatile, has a few catchy gold features (scarcity and liquidity). Lessen some of its defects, as the lack of impracticability and portability for payments.
Peter Thiel, a billionaire investor, declared this year he’s long on bitcoin, even if it’s not a mature payment tool.
“I would be long bitcoin, and neutral to skeptical of just about everything else at this point with a few possible exceptions. There will be one online equivalent to gold, and the one you’d bet on would be the biggest,” he declared” I would be long bitcoin, and neutral to skeptical of just about everything else at this point with a few possible exceptions. There will be online equivalent to gold, and the one you’d bet on would be the biggest.”
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