Goldman Sachs’ head of commodities research calls bitcoin ‘the retail inflation hedge’ and compares the cryptocurrency to copper. He says gold and bitcoin can co-exist and “doesn’t see bitcoin’s rising popularity as an existential threat to gold’s status as the currency of last resort.”
Goldman Sachs on Bitcoin, gold, copper and inflation hedge
Jeff Currie, global chief of commodities research at Goldman Sachs, revealed his outlook for bitcoin, gold and copper on Thursday. Commenting on the recent surge in bitcoin’s price, he told Bloomberg Markets that bitcoin, given the price chart, “looks very much” like copper. “What do they have in common?” he continued:
They are both risk-for-growth proxies, and I would argue that bitcoin is the retail inflation hedge.
Goldman Sach’s strategists led by Currie also wrote in a note Thursday that “Gold’s recent underperformance against real interest rates and the dollar has worried some investors that bitcoin is replacing gold as the inflation hedge of choice.”
The strategists attributed the recent drop in gold prices mainly to a coronavirus vaccine-driven investment strategy that prompted investors to buy riskier assets rather than forego gold based on its declining value.
Currie stressed that gold is a defensive asset and that “there really is no evidence” BTC “Question of gold stolen.” Goldman Sachs analysts wrote:
We don’t see bitcoin’s rising popularity as an existential threat to gold’s status as the currency of last resort … We see no evidence that bitcoin’s rally cannibalizes the gold bull market and believe the two could co-exist.
However, some analysts, including those at JPMorgan Chase, disagree with Goldman Sachs. They believe investors are move money from gold investments in bitcoin. Some companies have also reduced their exposure to gold to buy bitcoin to hedge against fiat currency devaluation, including the UK asset manager Ruffer.
Do you agree with Goldman Sachs on bitcoin and gold? Let us know in the comments below.
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