The head of commodity research at Goldman Sachs says that bitcoin is more like copper as a hedge against inflation than gold. He explained that they are both a “risk-on” inflation hedge whereas gold is a “risk-off” asset.
Bitcoin is more like copper than gold as an inflation hedge
Jeff Curry, global head of commodity research at Goldman Sachs, said in an interview with CNBC on Tuesday that when used as a hedge against inflation, cryptocurrencies are an alternative to copper, not gold. He elaborated:
You look at the relationship between bitcoin and copper, or the risk appetite and measure of bitcoin, and we’ve got a 10-year trading history on bitcoin – it’s definitely a risk asset.
He further emphasized that bitcoin and copper act “risk-on” to hedge against inflation while gold is seen as a safe haven or “risk-away” asset.
The Goldman analyst explained: “There is good inflation and there is bad inflation. Good inflation is when demand pulls it, and this is what Bitcoin hedges, this is the copper hedge, that is the oil hedge. He explained:
Gold hedges against bad inflation, where supply is being cut, which … focuses on shortages of chips, commodities and other types of input raw materials. And you’ll want to use gold as that hedge.
Goldman Sachs also said in a note on Monday that commodities are the best hedge against inflation overall.
Curry has spoken of bitcoin as an inflation hedge similar to copper when he said that “bitcoin is”. retail inflation hedge“
Goldman Sachs has been bullish on bitcoin lately. The bank said last week that B T c is now a new asset class. The firm formally established a bitcoin trading desk The beginning of May saw huge institutional demand for the cryptocurrency.
What do you think of bitcoin equating copper to gold as an inflation hedge? Let us know in the comments section below.
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