Goldman Sachs executive: Lack of Bitcoin regulation hinders traditional investors, and rising Bitcoin prices have not led to a decrease in gold demand

A Goldman Sachs Group Inc. executive said there is “no evidence” that rising bitcoin prices are reducing demand for gold.

Investors are now concerned that Bitcoin is reducing demand for gold, with Jeffrey Currie, global head of commodities research at Goldman Sachs Group, telling the Financial Times that he believes the two assets have different investor bases. In addition, he claimed that the lack of Bitcoin regulation is a barrier for traditional investors.

Nonetheless, the fact that bitcoin prices have shown incredible growth over the past month, especially after CBOE Global Markets launched bitcoin futures trading last Sunday, is that gold prices have actually trended downward.

However, Currie asserted that gold and Bitcoin have different characteristics and that recent price movements are due to the nature of demand for the assets.

He said:

“We believe Bitcoin is attracting more speculative inflows than gold.”

He also said that gold ETF holdings are at their highest level in the past four years and there is "no evidence that gold demand is being lost on a large scale."

While the lack of liquidity and high volatility may make Bitcoin “interesting,” it may not be attractive to investors seeking diversification and a hedge against gold’s gains.

Ten days ago, Goldman Sachs CEO Lloyd Blankfein said he thought it was too early for the bank to consider a Bitcoin strategy because they did not see Bitcoin as a store of value.

In November, Blankfein said that while he was “not happy” with Bitcoin, he was open to the cryptocurrency.