Goldman Sachs’ head of commodities analysis calls bitcoin “the retail inflation hedge” and likens the cryptocurrency to copper. He says gold and bitcoin can co-exist and does “not see bitcoin’s rising reputation as an existential risk to gold’s standing because the foreign money of final resort.”
Goldman Sachs on Bitcoin, Gold, Copper, and Inflation Hedge
Jeff Currie, world head of commodities analysis at Goldman Sachs, revealed his outlook for bitcoin, gold, and copper on Thursday. Commenting on the current surge in bitcoin’s value, he mentioned on Bloomberg Markets that its value chart, bitcoin seems “very comparable” to copper. “What have they got in frequent?” he continued:
They’re each risk-on development proxies, and I might argue that bitcoin is the retail inflation hedge.
Goldman Sach’s strategists led by Currie additionally wrote in a notice on Thursday that “Gold’s current underperformance versus actual charges and the greenback has left some buyers involved that bitcoin is changing gold because the inflation hedge of alternative.”
The strategists primarily attributed the current decline in gold’s value to a coronavirus vaccine-driven funding technique that led buyers to purchase riskier belongings, relatively than abandoning gold on the premise of its diminishing worth.
Currie emphasised that gold is a defensive asset and “there’s actually no proof” that BTC “stole demand from gold.” Goldman Sachs’ analysts wrote:
We don’t see bitcoin’s rising reputation as an existential risk to gold’s standing because the foreign money of final resort … We don’t see proof that bitcoin’s rally is cannibalizing gold’s bull market and consider the 2 can coexist.
Some analysts, together with these at JPMorgan Chase, disagree with Goldman Sachs, nonetheless. They consider that buyers are shifting cash out of gold investments into bitcoin. Some corporations have additionally scaled down their gold publicity to buy bitcoin to hedge in opposition to fiat foreign money devaluation, together with British asset supervisor Ruffer.
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