Although Bitcoin has yet to catch on as a mainstream store of value, its prices are following the trend of anemic growth since the start of the year. In particular, the recent Bitcoin price surge has been driven by several factors including low supply (with only 16,642 new coins being minted per month), and an increased interest from institutional investors. However, in a recent report published by the Bundesbank, the German central bank stated that Bitcoin is not a good hedge against inflation.
Bitcoin is a highly volatile digital asset that is not backed by any government or central bank. It also allows users to exchange cash or store value without being subject to government control or a middle man. However, there are many who still believe it is a speculative store of value that is not worth much more than the paper it is printed on.
In recent years, numerous alternative currencies have received mainstream recognition and economic significance. Bitcoin, for instance, is widely known as a cryptocurrency, meaning it is used in a virtual, digital setting and is not backed by any central bank. However, there are other currencies that have a similarly-themed economic and technological impact on society, such as Ethereum, Ripple, and Litecoin.. Read more about bitcoin price and let us know what you think.According to Goldman Sachs’ head of commodities research, bitcoin is closer to copper than gold as a hedge against inflation. He explained that both are inflation hedges with risk, while gold is a risk-free investment.
Bitcoin is closer to copper than gold as an inflation hedge
Jeff Curry, head of global commodities research at Goldman Sachs, said Tuesday in an interview with CNBC that cryptocurrencies are an alternative to copper, not gold, when used as an inflation hedge. He clarified: If you look at the correlation between bitcoin and copper or the risk appetite index and bitcoin, and we have a 10-year history of bitcoin trading, it’s certainly a risky asset. He also pointed out that bitcoin and copper are risky hedges against inflation, while gold is considered a safe haven or risk-free asset. A Goldman analyst said: There is good inflation and bad inflation. Inflation is good when demand pulls it, and that’s true for bitcoin, copper and oil. He described: Gold protects itself from bad inflation when supply falls, which … focuses on shortages of chips, commodities and other inputs. And you’ll want to use the gold as a cover. Goldman Sachs also said in a note Monday that commodities remain the best hedge against inflation. Curry previously referred to bitcoin as an inflation hedge, similar to copper, when he said bitcoin was an inflation hedge for individuals. Goldman Sachs has been backing Bitcoin lately. Last week, the bank announced that BTC is now a new asset class. In early May, the company officially set up a trading desk for bitcoin as it sees strong institutional demand for the cryptocurrency. What do you think about bitcoin being more copper than gold as an inflation hedge? Let us know your comments in the section below. Photo credit: Shutterstock, Pixabay, Wiki Commons Denial: This article is for information only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of any goods, services or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services referred to in this article.Bitcoin is an alternative to gold, and it’s even better than copper. Why? Because it’s digital. Anyone can buy as much as they want, and there are no taxes. This makes it a great store of value, as it’s inversely correlated to the dollar. It’s also inversely correlated to many other things. It’s also a form of inflation hedging, as it trades against many other things.. Read more about bitcoin price correction prediction and let us know what you think.
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