The debate between Bitcoin (BTC) and gold continues to intensify. Goldman Sachs commodity analysts expect the precious metal to have more advantages in 2022 as market volatility increases. We have prepared the analysts’ evaluations and predictions about Bitcoin, which is seen as yellow metal and digital gold, for Kriptokoin.com readers.
“We believe that the long gold position will be more effective in the current macro environment”
With gold prices holding steady at around $1,800, Bitcoin saw significant losses in January, down nearly 20%, making its worst year start since its inception. Bitcoin is most recently trading at around $37,500 per token, down more than 50% from record levels in November.
In a report published last week, commodity analysts at Goldman Sachs say slower economic growth in 2022 will continue to weigh on major cryptocurrencies. “While there is no talk of a recession yet, our economists are predicting a significant slowdown in U.S. growth,” analysts said, reminding that risk aversion is the main driver of investment interest in assets like gold versus stocks, and even more so Bitcoin.
In our view, gold is a risky inflation hedge, while Bitcoin is a risk-prone inflation hedge. We believe that a long gold position will be more effective in the current macro environment for investors looking for a way to protect their portfolios from growth-slowing and declining valuation risks.
Goldman Sachs: It’s too early for BTC to compete with gold or the dollar
Analysts note that while Bitcoin achieved record nominal returns last year, the market’s risk-adjusted returns are underperforming the overall market:
As we often say, we believe this is due to the fact that crypto is not used beyond a digital store of value. This tells us that it is still too early for crypto to compete with gold or the dollar for defensive asset investment flows.
Bitcoin alone is not suffering as investors begin to reduce the risks in their portfolios. The volatile tech sector has also suffered significantly, with the Nasdaq falling more than 11% since the start of the year. Thursday was particularly devastating for Facebook; The social media company tumbled more than 20% during the session, losing more than $200 billion in value.
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