Bitcoin haters don’t get its gold-like qualities, says Goldman Sachs

After a year of roaring success, Bitcoin has become the talk of the town.

After a massive surge in prices last year with a Bitcoin traded north of $15,000, institutional investors are starting to stream into the cryptocurrency space. Many of them are also voicing their opinions about Bitcoin, with some saying that Bitcoin has great promise while others aren’t so sure. In an interview with Bloomberg TV, Jeff Currie, Goldman Sachs’ head of commodities research, reasoned why Bitcoin is very much a commodity like Gold.

Criteria for a commodity

Currie pointed out that Bitcoin satisfies every criteria to qualify as a commodity:

  • It’s limited in supply,
  • It’s an asset not backed by a central authority
  • It is valued in the open market.
  • It has real utility as a store of wealth that’s immune to manipulation or theft.

The Wall Street insider also spoke his thoughts out loud when he wondered why Bitcoin faced so much hostility.

Reasons for Bitcoin’s volatility

Currie pinned the problem of high volatility in Bitcoin prices on low liquidity and lack of regulation to explain its volatility. He said that when compared to Gold, a significant portion of which is held by central banks and which is valued at $8.3 trillion, Bitcoin’s low valuation at around $200 billion and absence of a central bank to regulate liquidity was responsible for its volatility.

Later, Goldman Sachs’ CEO Lloyd Blankfein appeared on CNBC, where he was asked whether he would consider Bitcoin to be an asset like gold. In response, he said he was unsure about decentralised cryptocurrencies as an asset class and that he didn’t want to invest in Bitcoin until the problem of volatility came to a close.

Blankfein concluded that although he wasn’t comfortable with the idea of Bitcoin, everyone would have to accept Bitcoin as a natural step forward in the evolution of money if it were to be successful.

With investors and financial experts of every stripe entering the Bitcoin debate and with exchanges vying with each other to offer Bitcoin indexed funds, one thing’s for certain — Bitcoin has finally become mainstream. Have you jumped on the Bitcoin train yet?

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