Goldman Sachs, one of the largest U.S. banks by assets under management, believes that gold will outshine Bitcoin in the long term since it is a superior portfolio diversifier.
The banking giant argues that the yellow metal is less susceptible to monetary tightening.
Moreover, gold actually has use cases that are not based on purely speculative trading.
Back in 2020, Grayscale, the largest cryptocurrency asset manager, launched its very first ad campaign on TV that urged investors to drop gold in favor of Bitcoin. The campaign, which portrayed the lustrous metal as bulky and outdated, ruffled the feathers of many gold bugs, including Bitcoin nemesis Peter Schiff.
Despite being persistently marketed as the digital version of gold and a hedge against inflation, the largest cryptocurrency was performing in line with other risky assets after the U.S. Federal Reserve started hiking interest rates. Bitcoin is now down 75% from its lifetime peak.
According to Goldman, Bitcoin is actually trading like a volatile high-growth tech stock, meaning that the "inflation hedge" narrative has failed to materialize.
The bank has questioned the alleged utility of the largest cryptocurrency, arguing that it is "a solution looking for a problem."As reported by U.Today, Goldman Sachs is willing to invest a substantial sum of money into bargain crypto firms amid the cryptocurrency crash.
In May, Goldman Sachs CEO David Solomon said that he was bullish on blockchain.