Goldman Sachs says bitcoin’s meteoric price rise throughout 2020 has mirrored that of copper prices, which have historically served as a barometer for the global economy. 

According to a report by CNBC, analysts at Goldman Sachs have linked the price of bitcoin and copper, which have both been on a tear for most of this year despite the ongoing coronavirus pandemic. 

The base metal copper, which the report refers to as “Dr. Copper,” has generated a reputation among some analysts as a proxy for the health of the global economy due to its broad range of end-uses in both construction and consumer products. 

Goldman said,

In fact, since the depths of the first lockdown Bitcoin’s rise has closely tracked that of copper, a key proxy for global growth.

In a research note published Thursday, Goldman analysts claimed institutional and wealthy investors were largely avoiding crypto-assets due to issues with transparency, leaving retail investors to drive a wave of speculation. 

The report also dismissed the notion that bitcoin was replacing gold as the primary hedge against inflation. 

The note read, 

While there is some substitution occurring, we do not see Bitcoin’s rising popularity as an existential threat to gold’s status as the currency of last resort.

Goldman went on to call bitcoin a “retail reflation trade” while referring to gold as a defensive asset with “long-term real capital preservation.”

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