The former U.S. Treasury Secretary Lawrence Summers said cryptocurrencies could stay a feature of global markets as something akin to “digital gold,” even if their importance in economies will remain limited. Speaking at the end of a week in which Bitcoin whipsawed, Summers told Bloomberg Television’s “Wall Street Week” with David Westin that cryptocurrencies offered an alternative to gold for those seeking an asset “separate and apart from the day-to-day workings of governments.
“Crypto is here to stay and probably here to stay as a kind of digital gold.”
Summers further noted, 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,” the former U.S. Treasury Secretary noted. If cryptocurrencies became even a third of the total value of gold, Summers said that would be a “substantial appreciation from current levels” and that means there’s a “good prospect that crypto will be part of the system for quite a while to come.”
Bitcoin is often compared to gold.
Comparing the leading cryptocurrency to gold is common in the crypto community, with various estimates as to whether and how quickly their total market values might equalize. Earlier, Yassine Elmandjra, a crypto analyst at Cathie Wood’s Ark Investment Management LLC, said that if gold is assumed to have a market cap of around $10 trillion, “it’s not out of the question that Bitcoin will reach gold parity in the next five years.” With Bitcoin’s market cap around $700 billion, that could mean a price appreciation of around 14-fold or more.