Cryptocurrencies like bitcoin are not the "new gold," Goldman Sachs said in a note, advising investors that precious metals "remain a relevant asset class" in portfolios.
The analysts said that digital wallets, where people can store cryptocurrencies, are vulnerable to hacking, and virtual currencies also have "significant regulatory risks." For example, China recently banned cryptocurrency exchanges and put a stop to initial coin offerings (ICOs), the new way for start-ups to raise money by issuing digital tokens.
Goldman also said that cryptocurrencies are subject to network or infrastructure risk during a crisis. For example, there was a "hard fork" this summer when bitcoin split to create a new cryptocurrency called bitcoin cash.
The investment bank said that precious metals are "still the best long-term store of value"
Source:
https://www.cnbc.com/2017/10/19/bitcoin-is-not-the-new-gold-goldman-sachs-says.htmlWhat are your thoughts?
Bitcoin and gold have some similarities but I don't want to compare both since bitcoin is a digital currency and gold is a precious metal.
But I still pick bitcoin over gold for long term store of value.
Well, some of what they have commented on is right, but it's for the wrong reasons. They say that a lot of the virtual wallets are prone to hacking, which is actually really rare, provided that the wallet is trusted and has a backing for it already. It's the exchanges which seem to have abysmal network security and often fail to recover from hacks, although some do. They're right about regulatory risks, although that's only for government lapdogs. The network is only at a risk when people are trying to fork, which has happened once in ~8 years. Will be twice soon.
PMs being a store of value remains the same; accurate. Bitcoin is a volatile growth asset right now.
