10-06-2020 icon

Former Goldman Sachs Vice President Explains How Gold and Bitcoin can Protect Investors against Volatility

By calvin
bank building

Despite the fact that Bitcoin is still going through a stabilization process, a former Goldman Sachs Vice President seems confident that the cryptocurrency can protect investors against volatility. In an interview, Jason Urban, a former Goldman Sachs Vice president explained how gold and Bitcoin can be used to protect investors from volatile markets. 

Gold, Bitcoin, and the Stock Market

On Thursday, David Lin of Kitco News spoke with a former Goldman Sachs trader about gold, Bitcoin, and the stock market. After being asked if he had at any time in his career seen so much volatility in the markets, Urban stated he had never seen such volatility, even though he had traded through the 9/11 era and 2007 – 2008 financial crisis. 

According to Urban:

“No, never, and I [was] trading through the 9/11 era, 2007-2008, MF global imploding… there were stresses but nothing like this, and this is why I take the defensive stance because what we’re currently seeing is really truly unprecedented and we haven’t gotten completely through the snake so to speak yet… we don’t know what the knock-on effects are, when rent moratoriums are or eviction moratoriums are lifted, if they’re ever lifted, how is all that going to play out and what we’re going to be the knock-on effects.”

Bitcoin Comparable to Traditional Hedges?

Urban likes traditional hedges like silver and gold but also uses Bitcoin and other cryptocurrency assets for similar hedging purposes. He believes that the biggest thing to look for is a fixed supply similar to gold. It’s harder to devalue assets like gold and Bitcoin as governments find it hard to control them. 

Recently, Goldman Sachs took another step towards embracing cryptocurrencies. It revealed more plans on the creation of its cryptocurrency. Despite its previous criticism of Bitcoin, the bank revealed plans to create what appears to be a competing asset.

Photo by Etienne Martin on Unsplash