Goldman Sachs’ head of commodities research says bitcoin is more like copper as a hedge against inflation than gold. He explained that they are both “risk-on” inflation hedges whereas gold is a “risk off” asset.

Bitcoin Is More Like Copper Than Gold as Inflation Hedge

The global head of commodities research at Goldman Sachs, Jeff Currie, said in an interview with CNBC on Tuesday that cryptocurrencies are an alternative to copper, not gold, when used as a hedge against inflation. He elaborated:

You look at the correlation between bitcoin and copper, or a measure of risk appetite and bitcoin, and we’ve got 10 years of trading history on bitcoin — it is definitely a risk-on asset.

He further emphasized that bitcoin and copper act as “risk-on” inflation hedges whereas gold is viewed as a safe haven or a “risk off” asset.

The Goldman analyst explained: “There is good inflation and there is bad inflation. Good inflation is when demand pulls it, and that is what bitcoin hedges, that is what copper hedges, that is what oil hedges.” He described:

Gold hedges bad inflation, where supply is being curtailed, which is … focused on the shortages on chips, commodities and other types of input raw materials. And you would want to use gold as that hedge.

Goldman Sachs also said in a note Monday that commodities remain the best inflation hedge overall.

Currie has talked about bitcoin being similar to copper as an inflation hedge before when he said that “bitcoin is the retail inflation hedge.”

Goldman Sachs has recently been bullish about bitcoin. The bank said last week that BTC is now a new asset class. The firm formally established a bitcoin trading desk in early May as it sees heavy institutional demand for cryptocurrency.

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