“Digital currencies are not substitutes to gold. If anything, they may be a substitute for copper. And the reason I argue that is they’re pro-risk, they’re risk-on assets,” eff Currie, the head of commodities at Goldman Sachs, said in an interview with CNBC. The terms “risk-on” and “risk-off” usually refer to various economic environments and the corresponding investment strategies employed by traders.
"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 substitue for risk on inflation hedges not risk off inflation hedges" #crypto $BTC
Jeff Currie, Head of Commods at Goldman Sachs pic.twitter.com/Qc1yXnDfvo
— Joumanna Bercetche 🇱🇧 (@CNBCJou) June 1, 2021
Goldman Sachs commodities chief thrashes crypto.
Despite the growing mainstream popularity of the leading cryptocurrency Bitcoin’s “digital gold” narrative, cryptocurrencies share more with a much different kind of metal, said Jeff Currie, the head of commodities at Goldman Sachs. Currie compared cryptocurrencies with the “third rate” metal copper. The terms “risk-on” and “risk-off” usually refer to various economic environments and the corresponding investment strategies employed by traders. In a risk-on environment, the perspective is usually positive, markets are in an uptrend, and corporate earnings are surging. This prompted traders to get involved with more risky assets in an attempt to earn more profits.
Bitcoin’s demand is through payment systems.
Bitcoin’s demand is through payment systems. It’s going to be correlated to the business cycle. So, when we look at the substitute, if anything, we would argue that Bitcoin substitutes against risk-on inflation hedges, not risk-off inflation hedges,” Goldman Sachs commodities head explained. Earlier a report published by institutional digital assets data provider Kaiko Research on Monday made similar remarks. According to the researchers, the correlation between gold and bitcoin has recently plunged to its lowest point in the last couple of years.
However, the metal’s lower price—gold and silver cost roughly 475 times and seven times more than copper, respectively—and larger supply make copper a much more volatile asset.