Jeff Currie Talks Bitcoin, Risk, Inflation Hedge

The head of Commodities Research at Goldman Sachs spoke on Bloomberg TV regarding his view of Bitcoin. He compared it with copper and gold in particular.

Risk On, Risk Off

Goldman Sachs Head of Commodities Research Jeffrey Currie told Bloomberg TV on Dec. 17 that he sees Bitcoin as a risk-on growth proxy. He compared it to copper and said that overlaying their pricing charts shows that they act in much the same way.

Risk-on investments are those, across investment classes, that investors perceive as interesting when risk is relatively low. In contrast, risk-off investments are those that investors gravitate toward when risk is perceived as higher.

Bitcoin On, Gold Off

Jeff Currie sees the rise of bitcoin (and copper) as part of the next cycle. He points out that while some observers claimed that crypto was taking demand away from gold, this isn’t the case.

“Gold is still a defense asset. It has traded … the way it should in this big rotation… away from defensive assets, that cyclical rotation.”

Moreover, since bitcoin is not replacing gold within the risk profile, there’s no jockeying for position between them. “Gold and bitcoin can co-exist,” Currie said.

A Different Set of Eyes

JPMorgan Chase analysts observe the same rotation out of gold but see something completely different at hand. On Dec. 9, BeInCrypto reported that JPMorgan analysts expected investments to flow out of gold ETFs and into crypto, especially bitcoin. 

The JPMorgan strategists also pointed to the lack of institutional investors in the crypto field. They pointed out that since October, flows into the Grayscale Bitcoin Trust reached almost $2 billion.

Outflows going to exchange-traded funds backed by gold, on the other hand, rose to $7 billion. They saw bitcoin gaining at gold’s expense.

bitcoin gold

They’re Not Alone

Another giant weighing in on the debate is Blackrock Chief Investment officer Rick Rieder.

On Nov. 20, in an interview with CNBC Squawkbox, Rieder said that crypto was ‘here to stay’ and praised the digital currency’s functionality. 

Means of Storing Value

Whether Currie is right and gold and bitcoin can co-exist remains to be seen. However, the possibility of crypto replacing fiat in some cases has gained traction lately.

When MicroStrategy replaced much of the US dollar reserves in its corporate treasury with bitcoin, the market responded positively. Even Norway’s public investment fund, Oljefondet, is taking on some bitcoin exposure.

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James Hydzik is a finance and technology writer and editor based in Kyiv, Ukraine. He is especially interested in the development of regulation in the face of increasingly rapid technological change. He previously covered the CEE region for Financial Times banking and FDI magazines. An ardent believer in gut renovating eastern Europe one flat at a time, he currently holds more home renovation gear than crypto.

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