Q: You recently responded to a question suggesting investing in materials as ‘inflation protection’. I have zero exposure to the sector. I have 10% of my portfolio in IBIT in lieu of precious metals.
Would you consider bitcoin exposure as an effective alternative to materials for inflation protection?
Also, please offer your top 3 names in the materials sector, Canada or US, ranked if possible.
Thank you.
Would you consider bitcoin exposure as an effective alternative to materials for inflation protection?
Also, please offer your top 3 names in the materials sector, Canada or US, ranked if possible.
Thank you.
5i Research Answer:
We would consider BTC as having some inflation protection properties, particularly in the sense of 'asset inflation' rather than goods and services inflation. Asset inflation typically happens due to monetary policy easing (quantitative tightening, rates loosening, etc.). Although, we would not view BTC as a good proxy to the materials sector. It is more similar to a high beta Nasdaq or high-growth tech stock.
In the materials space, we like: AEM, NTR (for diversification outside of gold), and LIN.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in IBIT.