The cryptocurrency, often referred to as “digital gold,” has soared 217% this year through Thursday, stirring speculation it was beginning to replace gold as the safe-haven asset of choice. Gold, meanwhile, was up 24% this year.
“We do not see evidence that Bitcoin’s rally is cannibalizing gold’s bull market and believe the two can coexist,” wrote a team led by Jeffrey Currie, global head of commodities research at Goldman Sachs. “Bitcoin is the retail reflation trade while gold is a defensive asset with long-term real capital preservation.”
Bitcoin has acted more like copper, a proxy for global growth, rather than a defensive asset since the lockdowns began in March.
The development of a COVID-19 vaccine has caused the price of risk assets to soar. Bitcoin’s price has climbed 49% since Nov. 9, when Pfizer and BioNTech announced the positive results of their Phase 3 trial.
The vaccine-driven risk-on rotation has come at the expense of gold and other safe-haven assets. The precious metal fell as much as 9% since the vaccine was announced before trimming its losses. Gold set a record high of $2,051.50 an ounce on Aug. 6 and settled at $1887.20 on Thursday.