Bitcoin not “digital gold” according to Goldman Sachs director

The head of commodities research at leading banking firm Goldman Sachs Jeff Currie believes that Bitcoin might not be the digital gold it is hailed as in the industry.

According to Currie, the comparison between gold and Bitcoin is not accurate. He sees Bitcoin more like a digital “copper” as Bitcoin is more actively risky as an asset like copper, while he suggests gold is a better hedge against inflation. In an interview with CNBC’s Squawk Box Europe, the bank’s research director offered that he sees Bitcoin and other cryptocurrencies as “risk-on assets“. He noted:

“Digital currencies are not substitutes for gold. If anything, they would be a substitute for copper, they are pro-risk, risk-on assets. They are a substitute for risk on inflation hedges not risk-off inflation hedges… You look at the correlation between Bitcoin and copper, or a measure of risk appetite and Bitcoin, and we’ve got 10 years of trading history on Bitcoin — it is definitely a risk-on asset.

These comments follow a massive downturn in the market where Bitcoin fell by nearly 37%. In a matter of weeks, Bitcoin dropped from its highest-ever trading value of more than $60 000 USD to just above $36,600 USD at the time of writing.

Currie continued to say that “there is good inflation and there is bad inflation… Good inflation is when demand pulls it. [However] Gold hedges bad inflation, where supply is being curtailed, which is … focused on the shortages on chips, commodities, and other types of input raw materials. And you would want to use gold as that hedge.”

While Bitcoin and gold can coexist in the market, the Goldman Sachs director has said that it’s still too early for Bitcoin to compete in the market as a hedge against inflation. With the volatility, he argues Bitcoin is too vulnerable to lose value than to demand it as it stands.

The post Bitcoin not “digital gold” according to Goldman Sachs director appeared first on Coin Insider.

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