At the present time, bitcoin is suffering like it never has before. The world’s number one digital currency by market cap has fallen into oblivion after trading at its highest level of approximately $64,000 per unit in April. It is now currently selling for about $37,000 per unit. Many analysts, it seems, are beginning to write the currency off, but according to former U.S. Treasury Secretary Lawrence Summers, bitcoin and other cryptocurrencies could very well live up to their “digital gold” status in the coming years.
Lawrence Summers Thinks Highly of Crypto
While the role of crypto in digital economies is presently quite limited, Summers says that virtual assets could wind up becoming a serious staple of global markets, given that many people in the world are unbanked. It is hard, for some corners of the world, to gain access to the financial tools and services they need to stay afloat, and crypto presents many options that they would otherwise not have.
In addition, Summers was quick to say that gold, while important, is still very much tied to government activity and regulated financial agencies, and that bitcoin and its altcoin cousins could ultimately give people the privacy and the sense of security they desire and deserve. In an interview, he says:
Gold has been a primary asset of that kind for a long time. Crypto has a chance of becoming an agreed form that people who are looking for safety hold wealth in. My guess is that crypto is here to stay, and probably here to stay as a kind of digital gold.
His words come at a rather unique time, not only because bitcoin’s price has sunk into oblivion, but because several financial corporations – including Societe Generale – are now claiming that gold should be the focal point for most investors, and that they should probably spend less time analyzing and thinking about bitcoin. Societe Generale has recently published a report claiming that gold was a stronger stabilizer, and that those looking to keep their wealth secure would have more success with the precious metal.
But like Summers, there are many out there that have not quite given up on BTC yet. Yassine Elmandjra – a crypto analyst with Ark Investment Management LLC – says that it is not unlikely that gold and bitcoin will at some point share similar numbers when it comes to their market caps. She comments:
It is not out of the question that bitcoin will reach gold parity in the next five years.
Inflation Is Still a Danger
Summers was also quick to point out that the threat of inflation is still very much in play, which could serve bitcoin well in the long run. He states:
I do not think the Fed is projecting in a way that reflects the potential seriousness of the problem.
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