Goldman Sachsâ€™ head of commodities research calls bitcoin â€œthe retail inflation hedgeâ€ and likens the cryptocurrency to copper. He says gold and bitcoin can co-exist and does â€œnot see bitcoinâ€™s rising popularity as an existential threat to goldâ€™s status as the currency of last resort.â€
Goldman Sachs on Bitcoin, Gold, Copper, and Inflation Hedge
Jeff Currie, global head of commodities research at Goldman Sachs, revealed his outlook for bitcoin, gold, and copper on Thursday. Commenting on the recent surge in bitcoinâ€™s price, he said on Bloomberg Markets that looking at its price chart, bitcoin looks â€œvery similarâ€ to copper. â€œWhat do they have in common?â€ he continued:
Goldman Sachâ€™s strategists led by Currie also wrote in a note on Thursday that â€œGoldâ€™s recent underperformance versus real rates and the dollar has left some investors concerned that bitcoin is replacing gold as the inflation hedge of choice.â€
The strategists primarily attributed the recent decline in goldâ€™s price to a coronavirus vaccine-driven investment strategy that led investors to buy riskier assets, rather than abandoning gold on the basis of its diminishing value.
Currie emphasized that gold is a defensive asset and â€œthereâ€™s really no evidenceâ€ that BTC â€œstole demand from gold.â€ Goldman Sachsâ€™ analysts wrote:
Some analysts, including those at JPMorgan Chase, disagree with Goldman Sachs, however. They believe that investors are moving money out of gold investments into bitcoin. Some companies have also scaled down their gold exposure to purchase bitcoin to hedge against fiat currency devaluation, including British asset manager Ruffer.
Do you agree with Goldman Sachs about bitcoin and gold? Let us know in the comments section below.
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