Gold becomes the poor man’s crypto – economy

Goldman Sachs' head of energy research says: "Just as we argue that silver is the poor man's gold, perhaps gold will become the poor man's crypto." He sees funds flowing from gold into Bitcoin as inflation fears escalate, noting: “We have argued in the past that crypto and gold do not need to cannibalize each other.”

Goldman Sachs on gold and Bitcoin

Damian Courvalin, Head of Energy Research at Goldman Sachs, discussed the outlook for gold and crypto in an interview with Bloomberg on Thursday.

He was asked if he saw evidence of investors using assets other than gold, including Bitcoin and cryptocurrencies, to hedge against inflation. “I think it’s actually starting to happen,” he replied, adding: “We have argued historically that crypto and gold don’t have to cannibalize each other.”

Admitting that “it is a fact that we have seen substitution recently,” he explained:

Just as we argue that silver is the poor man's gold, perhaps gold will become the poor man's crypto.

Courvalin continued: “At this point there may be enough wealth to allocate both, especially, I think, as this inflation signal becomes more urgent.”

The executive noted: "The value of crypto is its network, just like the value of oil is the fact that it is consumed. Gold does not have that, like diamonds and art. It is just a purely defensive asset that can outperform over time."

The Goldman head of Energy Research further noted that investors moved into gold when China banned cryptocurrencies.

Many people have switched from gold to Bitcoin due to inflation fears. In October, billionaire hedge fund manager Paul Tudor Jones called, "Of course there is a place for crypto. It's clear that it's winning the race against gold at the moment... It would be my favorite over gold at the moment." He emphasized that “crypto is here to stay.”

In the same month, JPMorgan called, “Institutional investors appear to be returning to Bitcoin, perhaps seeing it as a better inflation hedge than gold.” The company too doubled on his long-term Bitcoin price prediction of $146,000 for Bitcoin as an alternative to gold.

Now some people like both gold and Bitcoin. For example, Rich Dad Poor Dad author Robert Kiyosaki has recommended both Bitcoin and gold. In his latest forecast he warned of a huge market crash followed by a new depression. He recommended, “Be Smart: Buy Gold, Silver, Bitcoin.”

What do you think of the Goldman Sachs executive's comments? Let us know in the comments section below.

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