Goldman Sachs thinks that gold is safer than the US dollar at the moment. Bitcoin, not so much
The strategists at Goldman Sachs, the elite investment bank, warned today that the days of the reliable US dollar may be numbered. But don’t hold your breath: they probably won’t get into Bitcoin.
According to Bloomberg, strategists said in a note to investors that the dollar’s position as the world’s reserve currency is threatened.
The dollar fell in value due to fears of a second wave in the coronavirus pandemic in the United States. The country, under President Donald Trump, has failed to contain the outbreak.
The nation with 330 million inhabitants has the highest number of confirmed cases in the world – 4.3 million, according to Johns Hopkins, and more than 1,000 deaths per day at a time when deaths in nations with similar affability have declined to manageable numbers.
“Combined with a record level of debt accumulation by the US government, real concerns about the longevity of the dollar as a reserve currency began to emerge,” said Goldman strategists, which included economist Jeffrey Curry.
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In return, gold is the “currency of last resort” that recently broke records after a price hike last week.
Now, in gold, they trust, “particularly in an environment like the current one, where governments are degrading their fiat currencies and bringing real interest rates to historic lows.”
Isn’t it Bitcoin, also known as digital gold? Probably: Goldman Sachs “detonated” the cryptocurrency in May, during a call with investors.
“Cryptocurrencies, including Bitcoin, are not an asset class,” said the company. Cryptocurrencies “do not show evidence of protection from inflation”, nor “do they generate gains from exposure to economic growth”.
The investment bank’s words of caution did not deter true Bitcoin enthusiasts. BTC is currently trading at $ 11,000 – a price it had not reached in almost a year.