The report noted that gold has been successful in developing non-investment cases, whereas the bitcoin is still looking for one.
SEATTLE (Scrap Monster): Goldman Sachs, in a recent research report, has provided a detailed analysis on the relevance of gold and bitcoin in a diversified portfolio. According to the report, gold is likely to outperform bitcoin in the long term. Also, gold is a better portfolio diversifier than gold.
As per Goldman Sachs analysis, the yellow metal is less likely to be impacted by tighter financial conditions, thus making it a useful portfolio diversifier. Gold has demonstrated non-speculative use cases. The widespread adoption of bitcoin by users are likely to be hindered by tight financial conditions. Also, the volatility associated with bitcoin are expected to remain at elevated levels until it develops reliable use cases. It must be noted that gold has managed to maintain its year-ago levels, while bitcoin has lost its value by 75% over the year, the research report noted.
The report noted that gold has been successful in developing non-investment cases, whereas the bitcoin is still looking for one. The more or less unmoved bitcoin supply for more than a year now indicates that it is largely held for investment purposes.
The structurally higher macro volatility and its acceptance an alternative option for portfolio diversification seems to be the other supporting factors for gold, Goldman Sachs noted.
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