Former US Treasury Secretary Lawrence Summers told Bloomberg’s Wall Street Week program that cryptocurrencies could endure as a feature of global markets akin to “digital gold.” Even though its importance in economies remains limited.
According to Summers, cryptocurrencies can become digital gold. Since, they offer an alternative to gold for those looking for an asset separate and apart from the day-to-day running of governments.
«Gold has been such a primary asset for a long time. Cryptocurrencies have the opportunity to become an agreed way in which people seeking security maintain their wealth. My take is that cryptocurrencies are here to stay, and probably to stay as some kind of digital gold.».
At the same time, Summers does not believe that cryptocurrencies are important to the broader economy and considers that it is unlikely that they will cover the majority of payments. Nonetheless, there is a good outlook that cryptocurrencies will be a part of the system for quite some time if they acquire at least a third of the total value of gold, which would be a substantial appreciation from current levels.
The debate that cryptocurrencies can become digital gold or not has already existed. Comparing the leading cryptocurrency to gold is common in the crypto community, with various estimates on whether and how quickly its total market values could match.
So Summers isn’t the only one to draw parallels between cryptocurrencies and gold recently. Mark Yusko, CEO of Morgan Creek, for example. He told CNBC’s Trading Nation in early May that Bitcoin could reach a value of $ 250,000 in four to five years. Comparing it to “digital gold” in doing so.
Meanwhile, SkyBridge Capital founder Anthony Scaramucci said that DOGE could be the silver of BTC’s gold. The investment adviser said that he recommends that his clients have a 1-3% stake in BTC.
Encouraging comments after unfortunate events for BTC
Meanwhile, his comments came just days after the catastrophic cryptocurrency price crash on May 19. The event, attributed to a number of root causes, including a ban on cryptocurrency services in China and Elon Musk’s tweets, saw a drop in the price of many of the world’s top tokens.
The Chinese market bans Bitcoin and cryptocurrencies, amid a debate about the energy consumption of the BTC network.
The 2021 bull run saw many new traders and buyers flocking to add cryptocurrencies to their portfolio, most of them entered to make some quick cash and are now panicking to a number of news headlines that are destined for deter new buyers. For example, the ban on Bitcoin in China is nothing new and they have been making that announcement since 2013.