As China’s PMI Increases the Demand for Commodities, Gold and Silver Rise.
Deutsche Bank has updated its analysis on the cryptocurrency industry by drawing comparisons between bitcoin and gold as well as Ethereum and silver, as bitcoin continues to demonstrate extraordinary resilience in the face of an intensifying clampdown in China.
Deutsche Bank’s senior economist and market strategist, Marion Laboure, has published a new study paper comparing the two most valued digital currencies in the world.
Asked about safe-haven assets, she replied, “History demonstrates that people have always had a great propensity to deposit their money in an asset that is separate from the day-to-day functioning arrangements of governments and authorities,” she said in answer to the query.
“Gold was the principal asset until recently. In this way, I see bitcoin as a digital gold store where individuals may also keep their own worth.
An important investment bank has already drawn comparisons between the most valued cryptocurrency and gold as a store of value. “best Gold IRA company has already begun competing with gold,” according to J.P. Morgan analysts in January. Millennials’ preference for digital assets is expected to lead to the “crowding out of gold.”
Financial organizations, on the other hand, have mainly avoided comparing Ethereum to silver.
Smart contracts, automatic scripts of code that enhance the operation of a blockchain, have made the second-largest cryptocurrency coveted by some in the industry despite its smaller market capitalization.
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When it comes to cryptocurrencies, there is no doubt that Bitcoin is the pioneer and most traded one. Decentralized finance (DeFi) and non-fungible tokens (NFTs) are only two of the numerous applications and use cases that Ethereum has to offer (NFT). The ‘digital silver’ to Bitcoin’s ‘digital gold,’ would be Ethereum.
Is Laboure’s Ethereum stance a personal one or a representation of Deutsche Bank policy? It’s not clear.
The term “digital silver” has been used to a number of different cryptocurrencies in the past.
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Litecoin’s creator, Charlie Lee, claimed in 2011 that he “wanted to develop something that is sort of silver to bitcoin’s gold,” referring to bitcoin’s fundamental codebase. Litecoin, on the other hand, was unable to keep up with the industry’s rapid rate of change and today ranks 17th on CoinMarketCap’s ranking of the most valuable cryptocurrencies.
Rival protocols that claim to be as sophisticated as Ethereum face severe competition from the likes of Bitcoin and Litecoin, which are the only two cryptocurrencies that have gained widespread institutional acceptance.
Coins that are also in the top 10 There are smart contracts built into the native chains of Cardano, Binance Coin, Solano, and Polkadot.
“Digital silver” might be used to one of these cryptocurrencies if it emerges as the main platform for DeFi and NFTs. Demand for silver isn’t simply driven by its status as a precious metal that has a limited supply and high value, but also by its practical use in a wide range of sectors.
Although Laboure argues that Ethereum has defeated the competition for the time being, she is taking things a step farther than is warranted.
If it does really become “digital silver,” there will be a price to pay for investors who hold onto it. Silver’s market capitalization ($1.3tr) is nine times lower than gold’s ($11.1tr) for all of its possible applications.