https://www.ft.com/content/7c025b17-beba-36cc-9145-26db83a838d2Goldman Sachs has answered the question many commodities investors are asking. And it’s a No, bitcoin is not sapping demand for gold, despite its explosive trajectory.
Jeffrey Currie, global head of commodities research for Goldman, argues that the investor pools for gold and bitcoin are “vastly different”. For starters, gold investors are automatically covered by anti-money laundering and counter-terrorist financing regulations when they use ETFs, futures or commodity indices. Bitcoin trading, however, is not regulated in the same way, throwing up regulatory hurdles for professional investors.
Bitcoin surged to a record high of $17,270 on Monday, according to Reuters data, up from around $1,000 at the beginning of the year as Cboe Global Markets launched bitcoin futures trading. Gold, on the other hand, slipped to its lowest level since mid-July on Monday, ending the day at $1,242 an ounce.
He added that there has been “no evidence of a mass exodus from gold”:
Second, there has been no discernible outflow of gold from ETFs. Indeed, total known gold ETF holdings recently reached their highest level since mid-2013 (currently up 12% YTD)