“Just as we argue that silver is a poor man’s gold, gold is possibly becoming a poor man’s crypto,” says Goldman Sachs’ head of energy research. As inflation fears rise, he sees funds flowing from gold into bitcoin, noting that “we’ve argued historically that crypto and gold do not have to cannibalize each other.”
Goldman Sachs on Bitcoin and Gold
In an interview on Thursday, Goldman Sachs’ Head of Energy Research, Damian Courvalin, discussed the outlook for gold and cryptocurrency.
He was asked if he saw any evidence of investors using assets other than gold to hedge against inflation, such as bitcoin and cryptocurrencies. “I think it’s actually starting,” he said, adding, “We’ve always argued that crypto and gold don’t have to cannibalize each other.”
He admitted that “it’s a fact, we have seen substitution recently,” and went on to explain:
Just as we argue that silver is a poor man’s gold, gold may become a poor man’s cryptocurrency.
“At this point, there may be enough wealth to allocate to both,” Courvalin continued, “especially as that inflation signal becomes more pressing.”
“The value of cryptocurrency is its network, just as the value of oil is the fact that it is consumed,” the executive said. Gold, like diamonds and art, lacks this. It’s simply a defensive asset that can outperform over a long period of time.”
Goldman’s head of Energy Research added that when China banned cryptocurrencies, investors shifted to gold.
As a result of inflation fears, many people have switched from gold to bitcoin. “Clearly, there’s a place for crypto,” billionaire hedge fund manager Paul Tudor Jones said in October. Clearly, it is currently winning the race against gold… At the moment, it would be my preferred option over gold.” “Crypto is here to stay,” he said emphatically.
JPMorgan said the same month, “Institutional investors appear to be returning to bitcoin, possibly seeing it as a better inflation hedge than gold.” The firm also increased its long-term bitcoin price prediction to $146K as an alternative to gold.
Meanwhile, some people prefer gold to bitcoin. Father of Wealth Author Robert Kiyosaki, for example, has advocated for both bitcoin and gold. In his most recent forecast, he predicted a massive market crash followed by a new depression. “Be wise: Buy gold, silver, and bitcoin,” he advised.