Bitcoin is risky digital ‘copper’, it’s not gold — Goldman Sachs commodities boss

Jeff Currie, the global head of commodities research at Goldman Sachs, has dismissed comparisons between Bitcoin and gold as an inflation hedge, and described BTC as more akin to a “risk-on” asset like copper.

Speaking on CNBC’s Squawk Box Europe on June 1, Currie noted that copper and Bitcoin both work as “risk-on assets” for hedging due to their volatility while describing gold as a more stable “risk-off” hedge”:

“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,” he added.

Currie’s comments come after the recent crypto downturn, which has seen Bitcoin’s price fall 36.8% in a few weeks according to CoinGecko, declining from around $57,000 on May 12 to roughly $36,000 today.

Ethereum has also taken a similar hit, dipping 39.58%, moving from around $4,300 on May 12 to around $2,598.

Copper has seen a lot of volatility in 2021. On Jan. 3 it was priced at $3.56 and rose to 4.30 by Feb. 24. The price then fluctuated between $3.50 to $4.00 from March until it broke out to $4.80 on May 10. The price now sits at $4.65.

Currie noted that “there is good inflation and there is bad inflation,” which different assets hedge against, and explained that, “Good inflation is when demand pulls it” and he said Bitcoin, copper and oil are hedges against this type of inflation. 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.”

The Goldman Sachs boss previously argued in an April note that Bitcoin cannot yet be seen as digital gold,…

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