Former US Treasury Secretary Lawrence Summers said that cryptocurrencies can remain a feature of global markets as something akin to "digital gold", even if their importance to the economy remains limited.

Speaking at the end of the week when Bitcoin was on the decline, Summers told Bloomberg Television Wall Street Week with David Westin that cryptocurrencies offer an alternative to gold for those looking for an asset, “separate and separate from the day-to-day work of government. ... "Gold has long been a major asset of this kind," said Summers, a paid member of Bloomberg. “Cryptocurrency has a chance to become an agreed upon form in which people who seek security store wealth. My guess is that the cryptocurrency will stay here, and will probably stay here as a kind of digital gold. "

According to Summers, if cryptocurrencies become even one third of the total value of gold, it will be "a significant increase in value over current levels," which means that "there is a good prospect that cryptocurrency will be part of the system for a long time."

Bitcoin is often compared to the yellow metal in the crypto community, with varying estimates of whether their total market value can be and how quickly to level out.

Yasin Elmanjra, a cryptanalyst at Cathie Wood's Ark Investment Management LLC, said earlier this month that if gold's market capitalization is expected to be around $ 10 trillion, “It is possible that Bitcoin will reach gold parity in the next five years. ... “With a Bitcoin market capitalization of about $ 700 billion, this could mean a price increase of about 14 times or more.

But Summers said that cryptocurrencies are irrelevant to the economy as a whole and are unlikely to ever be used for most payments.

Summers' comments were echoed by Nobel laureate Paul Krugman, who doubted the value of cryptocurrency as a medium of exchange or stable purchasing power, but said that some forms of it may continue to exist as an alternative to gold.

“Cryptocurrencies will crash soon? Not necessary, "Krugman wrote in the New York Times. "One fact that makes even crypto skeptics like me ponder is the longevity of gold as a highly valued asset."

Summers also said that President Joe Biden's administration is moving in the "right direction" by asking companies to pay more taxes. He argued that politicians in the past have not been guilty of applying "too strong antitrust" regulation, although he cautioned that it would be "grossly wrong" to target companies simply because of increased market share and profits. Returning to my concerns about the US economy. the risk of overheating, Summers said, the Federal Reserve needs to be more aware of the inflationary threat: "I don't think the Fed's forecasts reflect the potential severity of the problem." "I'm worried that with everything that's going on, the economy might pick up a little."