The inflation rate in the United States in July was 8.5%. On Friday August 26, the head of the FED, Jerome Powell, indicated that the fight against inflation continues. He specified that this fight which “will make American households and businesses suffer” is a necessary evil. At the same time, investors are looking for the best way to protect themselves from rising prices. And several of them think that bitcoin could help them. But, is this really the case?
Stocks do not protect against inflation and neither does bitcoin!
According to a tweet from CoinDesk on August 28, an analyst said, “Forget “inflation hedge”. Bitcoin is probably an interesting asset simply because it is separated from “heads of state”.“. According to this analyst, bitcoin (BTC) could not protect investors against inflation. The flagship cryptocurrency happens to work in correlation with stocks. However, these lastare not meant to be inflation hedges», unlike gold and commodities.
Moreover, it could be that inflation is more related to the depreciation of the currency than to the increase in the price of goods. And there is some evidence to suggest that bitcoin can protect investors from currency depreciation. Notably, bitcoin is not issued by any country or controlled by any government. It is decentralized! This makes it possible to use this cryptocurrency to successfully separate the money from the state. It should be noted that in the current global economic system, “heads of state matter more than heads of central banks“.
According to a CoinDesk analyst, even though bitcoin (BTC) is not suitable for inflation protection, it can prevent the state from having a stranglehold on money. In addition, this cryptocurrency could help fight currency depreciation.
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