{"id":264428,"date":"2021-06-02T05:41:06","date_gmt":"2021-06-02T02:41:06","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/bitcoin-is-risky-digital-copper-its-not-gold-goldman-sachs-commodities-boss\/"},"modified":"2021-06-02T05:41:06","modified_gmt":"2021-06-02T02:41:06","slug":"bitcoin-is-risky-digital-copper-its-not-gold-goldman-sachs-commodities-boss","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/bitcoin-is-risky-digital-copper-its-not-gold-goldman-sachs-commodities-boss\/","title":{"rendered":"# Bitcoin is risky digital ‘copper’, it\u2019s not gold \u2014 Goldman Sachs commodities boss"},"content":{"rendered":"

“# Bitcoin is risky digital ‘copper’, it\u2019s not gold \u2014 Goldman Sachs commodities boss <\/strong>”
\n<\/p>\n

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 \u201crisk-on\u201d asset like copper. <\/p>\n

Speaking on CNBC\u2019s Squawk Box Europe on June 1, Currie noted that copper and Bitcoin both work as \u201crisk-on assets\u201d for hedging due to their volatility while describing gold as a more stable \u201crisk-off\u201d hedge\u201d: <\/p>\n

“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”<\/p><\/blockquote>\n

\u201cYou look at the correlation between Bitcoin and copper, or a measure of risk app<\/a>etite and Bitcoin, and we\u2019ve got 10 years of trading history on Bitcoin \u2014 it is definitely a risk-on asset,\u201d he added.<\/p>\n

Currie\u2019s comments come after the recent crypto downturn, which has seen Bitcoin\u2019s price fall 36.8% in a few weeks according to CoinGecko, declining from around $57,000 on May 12 to roughly $36,000 today. <\/p>\n

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

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. <\/p>\n

Currie noted that \u201cthere is good inflation and there is bad inflation,\u201d which different assets hedge against, and explained that, \u201cGood inflation is when demand pulls it” and he said Bitcoin, copper and oil are hedges against this type of inflation. However:<\/p>\n

\u201cGold hedges bad inflation, where supply is being curtailed, which is \u2026 focused on the shortages on chips, commodities, and other types of input raw materials. And you would want to use gold as that hedge.\u201d<\/p><\/blockquote>\n

The Goldman Sachs boss previously argued in an April note that Bitcoin cannot yet be seen as digital gold, as its \u201cvulnerable to losing store-of-value demand to another, better-designed cryptocurrency,” adding that: “We think it is too early for Bitcoin to compete with gold for safe-haven demand and the two can coexist.”<\/p>\n

According to TradingView, since April 1 gold has been on an upward trend, increasing from $1686 up to $1900 as of today.<\/p>\n

\u00a0In a note from Monday, Currie stated that he believes commodities with real-world use are the best hedge against inflation because they ultimately rely on demand, and not growth rates:<\/p>\n

\u201cCommodities are spot assets that do not depend on forward growth rates but on the level of demand relative to the level of supply today.\u201d<\/p><\/blockquote>\n

\u201cAs a result, they hedge short-term unanticipated inflation, created when the level of aggregate demand is exceeding supply in the late stages of the business cycle,\u201d the note added.<\/p>\n