Macro Analyst Elucidates Bitcoin’s Role as Digital Gold
Its main advantage is the absence of yield, he says.
The absence of inherent yield in the first cryptocurrency is an advantage that makes it a safer store of value, according to macro analyst Luke Gromen in Natalie Brunell’s Coin Stories podcast.
He noted that any yield is associated with risks, citing the collapse of the FTX crypto exchange in 2022 as an example.
“Staking on FTX offered yield. Sorry, for some crypto enthusiasts this is a sore subject. But through staking on the platform, you could earn passive income. And how did that end?” he said.
Gromen pointed out that bank deposits yield interest precisely because depositors take on risk.
“Everyone thinks it’s their money in the bank. And they are mistaken, because it’s the credit institution’s money,” the analyst added.
Comparison with Ethereum
His remarks come amid ongoing comparisons between Bitcoin and Ethereum. Proponents of the second-largest cryptocurrency by market capitalization argue that the Proof-of-Stake consensus mechanism, which allows for staking rewards, makes it a more attractive alternative for traditional investors.
In early September, Joseph Lubin, founder of ConsenSys, stated that Wall Street firms would soon actively engage in staking and participate in DeFi, leading to a 100-fold increase in Ethereum’s value from its current level.
Similar sentiments were shared by JPMorgan analysts, who noted that some corporations investing in ETH intend to become validators to earn passive income.
Gromen asserted that Bitcoin’s value as digital gold lies precisely in the absence of counterparty risk. Market participants primarily buy cryptocurrency to hedge against inflation, government control, and economic instability.
“Anyone who says they prefer yield-bearing assets is simply displaying their Western financial privilege,” the macro analyst remarked.
Back in April, the co-founder of the ETH Strategy protocol, under the pseudonym Clouted, claimed the “uselessness” of the dollar amid Bitcoin’s rise.
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