Bitcoins Lacks Enough Functionality to Replace Gold, says Morningstar analyst

Bitcoins Lacks Enough Functionality to Replace Gold, says Morningstar analyst


There has been an influx of hypes hammering on the fact that bitcoin would be replacing gold in terms of investment and popularity, in the past. A Morningstar analyst, Kristoffer Inton has however refuted these hypes vehemently.

Morningstar Analyst Says no to Bitcoin Taking Over From Gold

The Morningstar analyst thinks bitcoin lacks the functionality that makes it well suited to stand a chance at replacing Gold. He pointed out that the total number of transactions performed on the bitcoin network is another important set back for the coin. With most traditional payment method processing as much as 10,000 transactions per seconds, the fact that bitcoin is still struggling to perform about 20 per seconds speak greatly against its functionality as a mainstream replacement for gold or any other top payment method.

The morning start analyst stated that:
“Amid the growing hype, some even floated the idea that cryptocurrency could one day replace gold as one of the world’s most widely accepted investment assets,”

In a recently released report, Inton gave a valid reason behind his conclusion that bitcoin is not ready and it needs more time and tweaks before it could be considered a threat to gold. He stated that:
“In order to assess the threat, we’ve created a framework to grade any asset class’s viability as a safe haven by focusing on liquidity, functional purpose, scarcity of supply, future demand certainty, and permanence. Through this framework, we conclude that cryptocurrency does not and will not challenge gold as a safe-haven asset class,”

What if These Hypes Were True?

As a rational man with years of experience as a Morningstar analyst, Inton gave the probable implication of the actualization of this threat. He stated that :
“If cryptocurrency were to displace gold’s investment case, the implications for gold prices would be devastating. 40% of gold demand relates to investment, so a shift in investment from gold to cryptocurrency would be a seismic shock.”

Going by his statements and analysis, one can easily conclude that bitcoin won’t be replacing gold any time soon.