Bitcoin’s (BTC) the parabolic rise in 2020 will not harm large traditional assets such as gold, according to Goldman Sachs.

One of the world’s largest investment banks, Goldman Sachs, has reportedly sent a note to investors to reassure its customers that Bitcoin does not pose an existential threat to gold, Bloomberg. reports December 18. “We see no evidence that Bitcoin’s rally cannibalizes the gold bull market and believe the two could co-exist,” the company wrote.

Goldman Sachs still admitted that Bitcoin’s continued rally could steal some demand from gold investors, stating:

“The recent underperformance of gold against real interest rates and the dollar has made some investors concerned that Bitcoin is replacing gold as the inflation hedge of choice. […] While there is some substitution taking place, we don’t see Bitcoin’s rising popularity as an existential threat to gold’s status as the currency of last resort. “

As Bitcoin hit new all-time highs in December, global investors are increasingly turning to Bitcoin. Christopher Wood, global head of equity strategy at independent investment bank Jeffries Financial, has reportedly lowered his exposure to gold to buy more Bitcoin.

According to a December 18 report through the Indian news agency Business Standard, the renowned market analyst is winding down his gold investment for the first time in years. Wood wrote in a note to investors that his BTC allocations make up 5% of his portfolio:

“The 50 percent weight in physical gold bullion in the portfolio will be reduced by five percentage points for the first time in years with the money invested in Bitcoin. If there is a major pullback in bitcoin from its current level, after the historic breakout above the USD 20,000 level, the intention is to add to this position. “

According to the report, Wood plans to further increase exposure to crypto in case of corrections. Still, the analyst took a similar stance to Goldman Sachs by also remaining bullish on gold. “This doesn’t mean that GREED & Fear will give up the gold. And the yellow metal should rise again if the Fed remains subdued in the face of the dramatic cyclical recovery coming on the other side of the pandemic, in line with the GREED & Fear baseline scenario, ”said Wood.

On December 17, Bitcoin set another historical record rises above USD 23,000. At the time of publication, Bitcoin is trading at $ 23,133 Cointelegraph’s BTC price index. In contrast to gold prices dropped on Thursday, with both spot hold and futures declining 0.3%. Gold lost about 10% from its August high of $ 2,076.

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