The inflation rate in the United States in July was 8.5%. On Friday, August 26, FED boss Jerome Powell indicated that the fight against inflation continues. He clarified that this struggle, 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 many of them think that bitcoin could help them. But, is this really the case?
Stocks don’t protect against inflation and neither does bitcoin!
According to tweet from CoinDesk on August 28, an analyst said: “ Forget about the “inflation hedge”. Bitcoin is probably an interesting asset simply because it is separated from the “heads of state”. ». According to this analyst, bitcoin (BTC) could not protect investors from inflation. It turns out that the flagship cryptocurrency works in correlation with stocks. However, the latter “ are not supposed to be inflation hedges », unlike gold and raw materials.
On the other hand, 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 are some elements that suggest that bitcoin can protect investors from the depreciation of the currency. 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 money from the state. It should be clarified that in the current world economic system, “ heads of state matter more than heads of central banks ».
According to a CoinDesk analyst, even if bitcoin (BTC) is not suitable for protecting against inflation, it can prevent the state from having a stranglehold on money. In addition, this cryptocurrency could help fight against the depreciation of the currency.
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Far from having cooled my ardor, an unsuccessful investment in 2017 on a cryptocurrency only increased my enthusiasm. I therefore resolved to study and understand the blockchain and its many uses and to relay information related to this ecosystem with my pen.