Former U.S. Treasury Secretary Lawrence Summers said cryptocurrencies could stay a feature of global markets as something akin to \u201cdigital gold,\u201d even if their importance in economies will remain limited.<\/p>\n
Speaking at the end of a week in which Bitcoin whipsawed, Summers told Bloomberg Television\u2019s \u201cWall Street Week\u201d with David Westin that cryptocurrencies offered an alternative to gold for those seeking an asset \u201cseparate and apart from the day-to-day workings of governments.\u201d<\/p>\n
\u201cGold has been a primary asset of that kind for a long time,\u201d said Summers, a paid contributor to Bloomberg. \u201cCrypto 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.\u201d<\/p>\n
If cryptocurrencies became even a third of the total value of gold, Summers said that would be a \u201csubstantial appreciation from current levels\u201d and that means there\u2019s a \u201cgood prospect that crypto will be part of the system for quite a while to come.\u201d<\/p>\n
Comparing Bitcoin to the yellow metal is common in the crypto community, with various estimates as to whether and how quickly their total market values might equalize.<\/p>\n
Yassine Elmandjra, crypto analyst at Cathie Wood\u2019s Ark Investment Management LLC, said earlier this month that if gold is assumed to have a market cap of around $10 trillion, \u201cit\u2019s not out of the question that Bitcoin will reach gold parity in the next five years.\u201d With Bitcoin\u2019s market cap around $700 billion, that could mean price appreciation of around 14-fold or more.<\/p>\n
But Summers said cryptocurrencies do not matter to the overall economy and were unlikely to ever serve as a majority of payments.<\/p>\n
Summers is on the board of directors of Square Inc. The company said this month that sales in the first quarter more than tripled, driven by skyrocketing Bitcoin purchases through the company\u2019s Cash App.<\/p>\n
Summers\u2019 comments were echoed by Nobel laureate Paul Krugman, who doubted crypto\u2019s value as a medium of exchange or stable purchasing power, but said some forms of it may continue to exist as an alternative to gold.<\/p>\n
\u201cAre cryptocurrencies headed for a crash sometime soon? Not necessarily,\u201d Krugman wrote in the New York Times. \u201cOne fact that gives even crypto skeptics like me pause is the durability of gold as a highly valued asset.\u201d<\/p>\n
Summers also said that President Joe Biden\u2019s administration is heading in the \u201cright direction\u201d by asking companies to pay more tax. He argued policy makers in the past had not been guilty of pursuing \u201ctoo much antitrust\u201d regulation although he warned it would be \u201cbadly wrong\u201d to go after companies just because of increasing market share and profits.<\/p>\n
Returning to his worry that the U.S. economy risks overheating, Summers said the Federal Reserve should be more aware of the inflationary threat.<\/p>\n
\u201cI don\u2019t think the Fed is projecting in a way that reflects the potential seriousness of the problem,\u201d he said. \u201cI am concerned that with everything that\u2019s going on, the economy may be a bit charging toward a wall.\u201d<\/p>\n
Former U.S. Treasury Secretary Lawrence Summers said cryptocurrencies could stay a feature of global markets as something akin to \u201cdigital gold”.<\/p>\n","protected":false},"author":341034,"featured_media":395229,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[44696],"tags":[187,69911],"class_list":["post-398325","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-bitcoin","tag-lawrence-summers"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/398325"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=398325"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/398325\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/395229"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=398325"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=398325"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=398325"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}