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Is Bitcoin Really A Hedge Against Inflation?

ByCandy Matheson
Published 01/26/2022, 12:09 AM
Updated 07/09/2023, 06:31 AM

Short answer...NO...in spite of what those flogging its purchase over the last couple of years have been, and still are, proclaiming (and with a straight face, too).

Take a look at the following weekly chart of Bitcoin and compare its price moves (peaks and valleys) with that of the 20-year 12-month Percentage Change, CPI graphic below (measuring inflation of goods and services).

While CPI has continued to rise since January of 2021 and hit a 12-month percentage increase of 7% in December 2021 (a 20-year high), Bitcoin has lost almost all of its gains made (twice) from January 2021, onward.

So...NO...Bitcoin is not a reliable hedge against inflation...case closed.

These graphics proved my point.

I've written numerous articles about Bitcoin over the last several years and you can find them this link.

BTC/USD Weekly Chart

CPI 12M Percentage Change

Source: U.S. Bureau of Labor Statistics

Latest comments

I don't mean to be disrespectful, but you are a dinosaur, Cathy.  How on earth can you possibly make this claim about bitcoin when you and your generation are simply unable to comprehend how bitcoin and blockchain based currencies work?  It's not the 1950's anymore.  Reagan is gone.  Times have changed.  Technology has passed you by.  You don't know what you're talking about.  Case in point: you say that bitcoin has not kept up with 7% inflation and then post a graph showing a 10,000% price increase.  Are you able to understand that being a "hedge" against inflation is a long term thing?  It's not simply that you point to one screenshot at one point in time and then declare SEE I TOLD YOU SO.  It's actually embarrassing to read, and frankly, the more your generation and our decrepit government leaders bleat on about how worthless bitcoin is, the more younger generations buy.
lol
... "Viewing the world through a straw..."
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