- There are crypto enthusiasts who often say that Bitcoin is a hedge against inflation.
- Even MicroStrategy CEO, Michael Saylor, believes the same thing.
- Saylor took to Twitter (NYSE:TWTR) to say that ‘Inflation is the problem. Bitcoin is the solution.’
MicroStrategy CEO, Michael Saylor, sparked an interesting topic on Twitter today. He tweeted, ‘Inflation is the problem. Bitcoin is the solution’, which Bitcoin Magazine immediately retweeted on its account.
‘Inflation is the problem. #Bitcoin is the solution.’ — Microstrategy (NASDAQ:MSTR) CEO pic.twitter.com/VZjXauLRjq— Bitcoin Magazine (@BitcoinMagazine) October 24, 2021
Like how the Twitter crypto space reacted to this tweet, the entire crypto market also has varied opinions and take on this matter. More so, this argument says that the central bank money-printing will soon lead to inflation or might decrease in value as time goes on.
In contrast, Bitcoin (like other cryptocurrencies), has a fixed limit of coins that could ever be created. This characteristic of Bitcoin, specifically makes it resistant to inflation.
Commenting on this matter, Monex Group CEO — Oki Matsumoto says,
There’s a crazy amount of money being printed right now, so the value of money is going down. Assets with limited supply, like bitcoin, real estate or shares/stocks, those price tags are going up.
Reports say that even though the pandemic resulted in drastic drops in the global economy, the crypto space still experienced an increase in asset prices. Perhaps this is because of the new technologies that emerged in the crypto space for the past year, like NFT, Play-To-Earn Games, Metaverse, etc.
However, there are also records that say inflation isn’t soaring at the moment. This brings us to the question —“If that’s the case, why do crypto enthusiasts still see Bitcoin as a hedge against inflation?”
To answer, some believe that people are buying Bitcoin now to evade future inflation. If you think about it, this is not totally wrong to do.
With that said, many crypto enthusiasts also think that when it comes to serving as a hedge against inflation, Bitcoin is not actually alone.
Founder of Moneyness Blog — J.P Koning, affirmed that “If you look around your house, everything is an inflation hedge. Your house itself is an inflation hedge, your table, your personal capital, your education are all inflation hedges because all of those things will rise in value as the purchasing power of the currency falls.”