The head of commodities research at Goldman Sachs called Bitcoin a “retail inflation hedge” and compared cryptocurrency to copper. He said that gold and Bitcoin can coexist, and “do not think that the increasing popularity of Bitcoin poses an existential threat to gold’s status as the last currency.”
Goldman Sachs’ hedge against bitcoin, gold, copper and inflation
Jeff Currie, head of global commodity research at Goldman Sachs, revealed his outlook for Bitcoin, gold and copper on Thursday. Commenting on the recent surge in the price of Bitcoin, he said that in the Bloomberg market, Bitcoin looks “very similar” to copper from the price chart. “What do they have in common?” He continued:
They are all representatives of risk growth, and I think Bitcoin is a hedge against retail inflation.
Goldman Sachs strategists headed by Corey also wrote in a report on Thursday: “Gold’s recent poor performance relative to real interest rates, and the U.S. dollar has caused some investors to worry that Bitcoin will replace gold and become the inflation of choice. Hedge.”
These strategists mainly attribute the recent fall in gold prices to a coronavirus vaccine-driven investment strategy that has led investors to purchase riskier assets instead of giving up gold based on the depreciation of the gold price.
Currie emphasized that gold is a defensive asset and there is “really no evidence that Bitcoin “stole the demand for gold.” The Goldman Sachs analyst wrote:
We believe that the increasing popularity of Bitcoin will not threaten the status of gold as a last resort currency… We see no evidence that the rise of Bitcoin has eroded the bull market for gold, and we believe that the two can coexist.
However, some analysts, including JPMorgan Chase, disagree with Goldman Sachs. They believe that investors are transferring funds from gold investment to Bitcoin. Some companies have also reduced their exposure to gold to buy fiat currency to hedge against the depreciation of fiat currency, including British asset manager Rufu.
Do you agree with Goldman Sachs’ views on Bitcoin and gold? Let us know in the comments section below.
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