Bitcoin Similar to Gold in Terms of Asset Allocation, According to Goldman Sachs Analyst

In a report published Wednesday, Goldman Sachs, it analyzed the potential of bitcoin as a form of money. Analyst Zach Pandl suggests it can facilitate transactions, but just in theory.

He acknowledges that the demand for cryptocurrencies could be related to “dissatisfaction” with regulated monetary systems with Google Trends showing that search concentration for “bitcoin” in the last five years was in Nigeria, South Africa, and Ghana — all places with unstable currencies and/or restrictions around foreign exchange use.

Pandl also sees evidence of a “classic speculative bubble” and that over the long run, crypto as currency may not pan out. “We should stress that, as money, cryptocurrencies should have low expected returns in the long run, despite their high returns recently,” he wrote.

Under the assumption that crypto returns should be equal to or lower than global real output growth in the low single digits, the analyst said: “Digital currencies should be thought of as low/zero return or hedge-like assets, akin to gold or certain other metals.” Source