Bank of Singapore economist: Bitcoin can become a competitor to gold

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Digital assets in the future can gain a foothold in the status of a safe-haven asset and become a competitor to gold. This view was presented by Mansur Mohi-Uddin, chief economist at Bank of Singapore.

Cryptocurrencies may partially displace gold by offering an electronic, rather than physical, store of value. However, important hurdles such as trust, volatility, regulatory acceptance and reputational risks still need to be addressed. https://t.co/20XQZLAGw2 pic.twitter.com/pQpTUSR5sJ

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— Bank of Singapore (@bankofSG) January 23, 2021

The expert believes that after overcoming regulatory barriers, cryptocurrencies may also begin to compete with fiat money as a medium of exchange, a unit of account. However, the chances of success are slim.

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In the view of the chief economist of Bank of Singapore, a more realistic scenario looks in which bitcoin will become an “electronic store of value”, displacing gold as its physical embodiment.

According to Mohi-Uddin, for this scenario to be realized, the first cryptocurrency will have to earn a greater level of trust, reduce volatility and gain approval from the authorities.

The researcher expressed optimism about the appointment of the head of the US Securities and Exchange Commission Gary Gensler. He believes this will increase the chances of launching a Bitcoin ETF.

 

“The industry will receive a trustworthy, reliable investment instrument. It will expand the number of investors, improve liquidity, reduce volatility and help cope with reputational risks, ”he explained.

 

Investment company VanEck recently filed a new Bitcoin ETF filing application.

JPMorgan strategists believe that the approval of a Bitcoin ETF in the United States will negatively affect the price of the first cryptocurrency in the short term.

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