S&P Global says cryptocurrencies have become mainstream and appear to be here to stay, as more companies are offering crypto services and adoption is growing worldwide. Meanwhile, an S&P analyst believes that bitcoinâ€™s rise is reminiscent of the U.S. gold rush.
S&P Global Says Bitcoin Has Become Mainstream
Financial information and analytics firm S&P Global released a special report on the current condition of cryptocurrencies last week. It states:
The report references a number of factors, such as legacy banks taking â€œa closer look at the asset class that could be integrated into the products and services offeringâ€ and companies like Paypal beginning to offer cryptocurrency services. Crypto adoption is also growing in countries where people â€œseek to protect their income against inflation and currency controlsâ€ or for faster and cheaper remittances.
In addition, Jim Wiederhold, S&P Globalâ€™s associate director for commodities and real assets, authored an opinion piece about bitcoin last week. He wrote:
The analyst explained that â€œRecently, the parallels between the two assets have grown.â€ He noted that both are scarce, â€œhave the potential to be held outside of conventional financial markets,â€ and are good inflation hedges. In addition, they are â€œuncorrelated to other popular asset classes in portfolios.â€ However, he pointed out that bitcoinâ€™s volatility over the past five years is multiple times higher than other asset classes.
Pointing out the differences between gold and bitcoin, including the supply limit, he continued, â€œConcerns of bitcoin theft were rampant a few years ago; though as bitcoin becomes more mainstream, these worries are fading. Although lingering technology and exchange counterparty risks remain.â€
The analyst concluded that while gold is a more established asset, bitcoin â€œis in its infancy, but it is slowly becoming more easily accessible to mainstream investors.â€
According to the S&P Global special report:
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