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    Home » Crypto News » Crypto is Not a Substitute for Gold but Copper: Goldman Sachs Head of Commodity Research

    Crypto is Not a Substitute for Gold but Copper: Goldman Sachs Head of Commodity Research

    Author: Dimitar Dzhondzhorov

    Last Updated Jun 1, 2021 @ 19:35

    Jeff Currie – an executive at Goldman Sachs – surmised that digital assets are a replacement to copper, not gold.

    Jeff Currie – the Global Head of Commodities Research at Goldman Sachs – shared his thoughts on Bitcoin being a gold replacement. According to him, digital assets are substitutes for copper.

    From Gold to Copper

    In a recent CNBC interview, Jeff Currie warned that cryptocurrencies are risky and people should not consider them as a gold substitute. He opined that copper is a much more similar asset to be compared to digital assets:

    ”Digital currencies are not substitutes for gold. If anything they would be a substitute for copper. They are pro-risk, risk-on assets.”

    Currie explained that Bitcoin is very volatile and should not be called ‘digital gold’ as it is a very new asset. Having only around 11 years of trading history, the primary cryptocurrency could be a substitute for copper or oil as they are risk-on assets as he analyzed:

    ”Bitcoin substitutes against risk-on inflation hedges, not risk-off inflation hedges. There’s good inflation and bad inflation. Good inflation is when demand pulls it. And that’s what Bitcoin hedges, that’s what copper hedges, that’s what oil hedges.”

    On the other hand, Currie described that the precious metal is a risk-off asset, which prevents inflation.

    What is Goldman Sachs’ Stance Towards Crypto?

    Goldman Sachs has demonstrated a very controversial viewpoint towards cryptocurrencies throughout the years. In 2017, the institution launched a cryptocurrency trading desk, decided to halt it, and eventually restarted it. In 2020 the global investment bank said that digital assets are a bad investment. Moreover, some analysts from the company argued that bitcoin and cryptocurrencies are not an asset class.

    ADVERTISEMENT

    However, a report from last week suggested things may have changed.

    The announcement described the essential characteristics of the leading cryptocurrencies and the usefulness of each one. The institution opined on some of the most popular digital assets. According to it, Bitcoin serves as a large-cap currency, XRP as a real-time settlement system, Ethereum as a smart contract platform, BNB as a utility token/application, and Polkadot as a blockchain with interoperability capabilities.

    Additionally, Goldman Sachs said that Bitcoin’s value lies fundamentally in its use and acceptance.

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    Tags: Bitcoin Goldman Sachs
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    About The Author

    Dimitar Dzhondzhorov
    More posts by this author

    Dimitar got interested in cryptocurrencies back in 2018 amid the prolonged bear market. His biggest passion in the field is Bitcoin and he was fascinated with its journey. With a flair for producing high-quality content, he started covering the cryptocurrency space in late 2018. His hobby is football.

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