Cryptocurrencies are replacing gold as means of protection against inflation, has recognized Goldman Sachs’s Head of Energy Research, Damian Courvalin, noting the flight of investments to the crypto market from the precious metal.
Answering on whether he was observing that investors have used assets beyond gold, such as Bitcoin or other cryptocurrencies, to hedge against the growth of consumer prices, Courvalin told Bloomberg: “In fact, I think this is happening.”
Recalling an earlier forecast from Goldman Sachs that “cryptocurrency and gold should not cannibalize each other,” the Head of Energy Research at the US investment bank acknowledged as a “fact” that “has been registered a replacement recently.”
The expert mentioned as one of the pieces of evidence the influx of investments in gold detected after China introduced restrictions against the crypto market this year.
“Just like we argue that silver is the poor man’s gold, gold is maybe becoming the poor man’s crypto,” admitted the expert.
Courvalin continued: “At this point, there may be enough wealth to allocate to both, especially, I think, as that inflation signal is starting to be more pressing.”
Also, he noted: “The value of crypto is its network, just like the value of oil is the fact that it’s consumed. Gold, like diamonds and art, doesn’t have that. It’s just a pure defensive asset that can outperform over a significant period of time.”
Further, the bank’s Head of Energy Research noted that when China banned cryptocurrencies, investors moved into gold.
Many people have turned from gold to Bitcoin amid inflation fears. In October, billionaire hedge fund manager Paul Tudor Jones said, “Clearly, there’s a place for crypto. Clearly, it’s winning the race against gold at the moment … It would be my preferred one over gold at the moment.” He also emphasized that “crypto is here to stay.”
Last month, JPMorgan said, “Institutional investors appear to be returning to Bitcoin perhaps seeing it as a better inflation hedge than gold.” The firm also doubled down on its long-term Bitcoin price prediction of $146K for bitcoin as an alternative to gold. Meanwhile, some people choose both gold and Bitcoin. Rich Dad Poor Dad author Robert Kiyosaki, for example, has been recommending both Bitcoin and gold. In his latest prediction, he warned of a giant market crash followed by a new depression. So he advised, “Be smart: Buy gold, silver, Bitcoin.”