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 described this fight as a necessary evil “that will make American families and businesses suffer.” At the same time, investors are looking for the best way to protect themselves from rising prices. And some of them are thinking 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 “inflation scale”. 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 lastthey are not supposed to be an inflation hedge», unlike gold and commodities.
In addition, inflation may have more to do with the depreciation of the currency than the increase in the price of goods. And there is some evidence to suggest that bitcoin can protect investors from currency depreciation. In particular, 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, “it is a matter for heads of state rather than heads of central banks“.
According to CoinDesk analysts, although bitcoin (BTC) is not suitable for protection from inflation, it can prevent the state from having a stranglehold on money. In addition, the cryptocurrency could help fight currency depreciation.
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Far from dampening my enthusiasm, an unsuccessful investment in cryptocurrency in 2017 only increased my enthusiasm. So I decided to study and understand the blockchain and its many uses and share my pen knowledge related to this ecosystem.
