Goldman Sachs is one of the most reputed names in the world of finance. The multinational finance and investment giant has now shown great faith in Bitcoin - comparing it with gold. Goldman Sachs analyst Zach Pandl sent a report to their clients, stating that cryptocurrencies can be compared to Gold and other precious metals.

While there has been a fall in the price of Bitcoins over the past couple of weeks, it still continues to be the no. 1 currency in terms of market cap. While Bitcoin’s market share seems to be on a free fall, and its market dominance is at its lowest ever - at just 32%, the currency still has a lot of support, especially from organizations such as Goldman Sachs.

This statement from Goldman Sachs is bound to have some impact on the currency’s growth. Markets of cryptocurrencies function on financial principles of demand and supply, but also on a third principle, that of sentiments. With major names such as Goldman Sachs backing cryptocurrencies, investors will feel more confident in investing their money.

Zach Pandl stated that while the current markets might be unstable, the long-term growth of currencies such as Bitcoin is bound to drive the markets. Moreover, another exciting thing that Pandl pointed out was that while cryptocurrencies have been showing a high growth rate in the past couple of weeks, the future might reveal lower expected returns - especially compared to the massive gains of these recent months.

"We should stress that, like money, cryptocurrencies should have low expected returns in the long run, despite their high returns recently. Digital currencies should be thought of as low/zero return or hedge-like assets, akin to gold or certain other metals."

In his report to the clients, Pandl also states that one of the biggest reasons behind the rise of Bitcoin and other similar cryptocurrencies is that the investors are dissatisfied with the regulated monetary system and the current banking infrastructure.

Interestingly, search trends have also pointed out a similar correlation between countries with poor banking infrastructure and search volumes of Bitcoins and other cryptocurrencies. Countries with unstable banking systems such as Nigeria and Ghana have a high search volume of keywords relating to cryptocurrency as per search trends.

While he does compare cryptocurrencies with Gold and other similar precious metals - Pandl also shows dissatisfaction with the way the markets are growing. His views here are identical to other eminent names in the cryptocurrency world such as that of Vitalik Buterin - the Ethereum Co-Founder.

Buterin had pointed out in the past that he is unhappy with the way the markets are progressing. He stated that while the market cap has hit 0.5 Trillion USD, ‘have we really earned it.’ Cryptocurrencies have quickly been becoming a ‘get rich quick’ scheme rather than the technology that would drive the economy towards a digital evolution.