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Goldman Sachs: Bitcoin Is an Various Inflation Hedge to Copper, Not Gold

06/03/2021

Goldman Sachs’ head of commodities analysis says bitcoin is extra like copper as a hedge in opposition to inflation than gold. He defined that they’re each “risk-on” inflation hedges whereas gold is a “danger off” asset.

Bitcoin Is Extra Like Copper Than Gold as Inflation Hedge

The worldwide head of commodities analysis at Goldman Sachs, Jeff Currie, stated in an interview with CNBC on Tuesday that cryptocurrencies are an alternative choice to copper, not gold, when used as a hedge in opposition to inflation. He elaborated:

You take a look at the correlation between bitcoin and copper, or a measure of danger urge for food and bitcoin, and we’ve acquired 10 years of buying and selling historical past on bitcoin — it’s undoubtedly a risk-on asset.

He additional emphasised that bitcoin and copper act as “risk-on” inflation hedges whereas gold is considered as a secure haven or a “danger off” asset.

The Goldman analyst defined: “There may be good inflation and there’s dangerous inflation. Good inflation is when demand pulls it, and that’s what bitcoin hedges, that’s what copper hedges, that’s what oil hedges.” He described:

Gold hedges dangerous inflation, the place provide is being curtailed, which is … targeted on the shortages on chips, commodities and different kinds of enter uncooked supplies. And you’ll need to use gold as that hedge.

Goldman Sachs additionally stated in a notice Monday that commodities stay the perfect inflation hedge general.

Currie has talked about bitcoin being just like copper as an inflation hedge earlier than when he stated that “bitcoin is the retail inflation hedge.”

Goldman Sachs has lately been bullish about bitcoin. The financial institution stated final week that BTC is now a brand new asset class. The agency formally established a bitcoin buying and selling desk in early Could because it sees heavy institutional demand for cryptocurrency.

What do you concentrate on bitcoin being just like copper and never gold as an inflation hedge? Tell us within the feedback part under.