Bitcoin is Arguably a Better Inflation Hedge than Gold

Bitcoin is Arguably a Better Inflation Hedge than Gold

Several factors are weighing on the U.S. currency, including trade policies with China, OPEC oil price hikes, and Federal Reserve interest rate hikes, which caused the greenback to lose 15% of its value against the euro. Despite these headwinds, Bitcoin has decoupled from global markets and continues to set new records. A single Bitcoin rose to $7,000 in September 2017 and is valued at $69,000 as of November 10th, an all-time high.

Cryptocurrency seems to be on the rise, but how these new forms of digital investments are taxed is causing some confusion. Crypto Casino — the world’s first multi-cryptocurrency mobile casino. Anonymous, safe and secure mobile gambling experience that allows players to bet responsibly with cryptocurrency. Furthermore, you’re liable for taxes when you’re trading between virtual currencies and fiat currencies (such as USD). More, whether goods and services are denominated in dollars or bitcoins—or some other cryptocurrency—this past year’s rise in the cost of living has not rendered consumers unable to afford necessities.

For years, gold has long been regarded as the resorted inflation hedge. But the world is much different now. Gold’s correlation to a broad basket of assets—gold’s lack of correlation to almost any other asset, makes it a unique portfolio diversification tool. Owning physical gold exposes an investor to risks only very slightly different from owning cash or a money market fund—risks so small that they’re often completely overwhelmed by the return on physical gold investments.

Bitcoin is a well-established, world-leading cryptocurrency with the makings of an excellent hedge that’s arguably better than gold. It’s especially attractive to investors who believe that governments will increase their reliance on inflationary policies to help fund growing deficits. And with the supply of new bitcoins programmed to halve roughly every four years until there are no more, there’s an element of deflation built into this currency that helps give it real value—which is something central banks can’t guarantee.

Below are some of the reasons BTC edge gold in terms of inflation:

Understanding Rising Inflation

The CPI measures changes in living costs for a fixed market basket of goods and services purchased by an average consumer. The CPI is useful for tracking inflation, particularly when switching from a world where inflation is hostile to one where inflation is positive or from a goods-based economy to a service economy.

The increase outpaces the previous month’s 4.4% rate of increase, thereby casting doubt on claims that inflation is gradually subsiding. Energy increased 30% from September to November, with home heating oil up 88 cents per gallon. Energy accounts for roughly one-sixth of the items in the CPI basket, or about 19% of its weighting.

The price of bitcoin has been rising as a result of several factors. As the global economy continues to expand and as interest rates continue to fall, governments have been ramping up spending, which leads to a growing money supply. The U.K. inflation risk is due to most U.K. income and assets being exposed to escalating prices. If the inflation rate gets high enough, this could keep the income generated by those income and asset holdings below your monthly withdrawal target.

1. Bitcoin isn’t Tied to a Single Currency or Economy

Bitcoin can be exchanged for products and services in any country. Unlike cash and gold, Bitcoin is not attached to your identity, so no credit card numbers or bank account numbers are required. Nor does Bitcoin lag like typical bank transfers.

In fact, it’s not even controlled by a single company or person; it operates across international borders and can be exchanged for any of the world’s traditional currencies, including the U.S. dollar, Chinese yuan, Brazilian real, Indian rupee, etc.

2. Bitcoin Has Limited Supply

Bitcoin’s fixed money supply is an advantage over gold because many believe its trustworthiness and traceability make it a better store of value. The expansion of the money supply in the world has outpaced gold in recent years, theoretically making gold a less attractive inflation hedge than when global currencies were pegged to the value of gold.

3. Easy Transferability and Store of Value

Bitcoin is a revolutionary payment platform that’s taking the world by storm. Trust me, I know. I’m a futurist and an avid bitcoin user. It has been quite a ride seeing it gain widespread popularity with almost no press coverage. With the digital currency now accepted as payment from companies like Microsoft and Dish and special ATMs, you can buy bitcoins with cash as quickly as sodas with credit cards. So why use Bitcoin? It’s totally decentralized – there are no banks or governments involved – so you know that your money is going directly into your wallet.

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