Is Bitcoin a store of value?
Three current reports show once again that the prevailing narrative surrounding Bitcoin (BTC) is that digital gold, a safe haven, is not that easy and the jury has not yet made a decision on this question.
Analysts from Goldman Sachs, Arca and Bloomberg Intelligence discussed BTC as a store of value, safe haven or defensive asset from different perspectives. Some argue that Bitcoin and gold are not necessarily comparable, and that BTC is not a defensive asset at all, while one analyst sees an upward trend in “coming digital reserve”.
So is Bitcoin a store of value?
Is Bitcoin a store of value – according to Goldman Sachs
While BTC is a competitor to other cryptocurrencies, it is not a direct competitor of gold and the reason is its frequent volatility, analysts at American investment bank giant Goldman Sachs argued in a note, as Market Insider reported.
“Gold competes with crypto as much as it does with other riskier assets like stocks and cyclical commodities. We see gold as a hedge against inflation and crypto as an inflation hedge. “
In addition, like other assets, competition between Bitcoin and Ethereum (ETH) prevents each of them from becoming an asset that investors consider safe, the report said.
Given that Ethereum is the most popular smart contract platform, ETH “currently looks like the cryptocurrency with the highest real-world usage potential” and it’s something that “could eventually overtake Bitcoin as money.” Leading electronics, added she added.
What Bitcoin lacks despite its “stronger brand” are certain practical use cases. Speaking of real-world use cases, payment giant Visa says its consumers worldwide spent more than $ 1 billion in crypto on goods and services through its crypto-linked cards in the first 6 months of the year.
Is Bitcoin a store of value?– According to Arca
Jeff Dorman, Chief Investment Officer (CIO) of the US investment management firm Arca, writes: “Bitcoin is not a ‘defensive asset’, not even when it comes to digital assets. Hedge investments are more stable investments with more consistent returns – they tend to be less risky and more likely to have lower long-term returns in terms of income.
While defensive assets like utility stocks, healthcare stocks and US Treasuries are expected to perform well regardless of the economic cycle, and there are companies and projects in the digital asset industry that exhibit these characteristics, Bitcoin is not one of them, according to Dorman.
At 10:49 UTC, BTC was trading at $ 34,701. It rose 2% in one day, 3.5% in a week, and 20% year over year. For comparison, ETH is trading at $ 2,380, 5% higher than yesterday and almost 10% higher than a week ago. It is 222% higher than last year.
To get his point home, Dorman compared Bitcoin “under negative pressure from China, ESG, prominent CEOs, Fed regime change and regulatory pressures” to Decentralized Mainstream (DeFi) financial brands like SUSHI with 14% dividend yield, sales credit and Free cash flows every day regardless of the market cycle, and gaming tokens like Axie Infinity (AXS) “grows exponentially, with equity backing and the token is clearly backed by the company’s balance sheet assets.”
Is Bitcoin a store of value – according to Bloomberg Intelligence
While the previous two analysts have expressed certain similarities in their views, Bloomberg Intelligence appears to be on the other side of that debate.
Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence added:
“As unstoppable and competitive, money and debt GDP growth policies are a race in most countries with gold and its emerging digital counterpart Bitcoin helping to build a fence. The diminishing amount that comes with the currency’s downtrend over time and the significant amount of money pumped into the system is a solid foundation for Bitcoin’s price to rise. “
In addition, he argues, Bitcoin may not just be a digital version of gold. BTC’s potential path is to stabilize 100x an ounce of gold and continue its volatility on a downward path.
Speaking of bearish volatility as well as bullish development, Bitcoin’s continued rise into the mainstream will follow. “Bitcoin volatility is expected to continue into the beginning of the second half of the year to continue its entire downtrend since day one,” said McGlone, adding that a partial allocation to BTC may be possible.
The crypto market is expected to enter a more mature phase in the second half of this year. According to the analyst, “Bitcoin entered support layers in the early 2H” and is likely to continue its uptrend, likely with some macro-economic impetus from lower bond yields.
“If long-term US Treasuries stay below 2%, Bitcoin and Gold are poised to take the lead in 2H performance – a two-quarter decline could prove to be a market pause
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