Morgan Stanley: These three points prove that Bitcoin is not as safe-haven as gold

Last week, the stock market was volatile due to concerns about a possible war between the United States and North Korea. At the same time, the price of Bitcoin and the total value of the cryptocurrency market hit new highs, and many analysts believe that investors have chosen cryptocurrencies for economic risk-averse. Historically, only gold, silver and other precious metals have played this role, but more and more young investors are starting to buy Bitcoin to avoid the consequences of economic instability and inflation.

However, Tom Price, an equity strategist at Morgan Stanley, said Bitcoin has yet to prove itself as a viable safe-haven asset for investors. Price reportedly said that while Bitcoin is a stronger medium of exchange than gold — it is divisible and portable — cryptocurrencies are not mature enough to be an inflation hedge. Even if Bitcoin ever successfully proves its safe-haven function, he warned that such success would likely lead to the emergence of more competing cryptocurrencies, hindering the stability of Bitcoin prices.

Some say the Bitcoin protocol controls its issuance and is the basis for its rising value… However, if Bitcoin is truly successful in the long term, we will see the emergence of more and more competing cryptocurrencies and market strategies to develop new economic benefits - this is a huge risk to the price of Bitcoin.

In addition, Price also pointed out that Bitcoin users need electricity and the Internet to access the network . Although Blockstream has just launched a satellite network that allows users to download full nodes without an Internet connection, this solution still consumes energy. In contrast, the use of gold does not require electricity.

Trust is also an issue. Blockchain Capital analyst Spencer Bogart believes that Bitcoin is superior to gold in terms of both medium of exchange and value preservation. However, Bitcoin is a new innovation and cannot gain the same trust as gold, a value preservation product throughout history:

Gold has some characteristics that Bitcoin does not have: Gold has been used as a store of value for more than 1,000 years. This represents the credibility of gold, and people are willing to choose this asset to preserve value.

Even so, the popularity of cryptocurrencies continues to grow, and even mainstream finance has taken notice. Goldman Sachs recently admitted that it is difficult for them to ignore cryptocurrencies. In recent months, ICO investment has surpassed venture capital (VC) for early Internet companies, and bankers have begun to leave the mainstream financial field and choose to set up their own ICO investment companies.