5 Ways How Bitcoin Can be a Hedge Against Inflation

Today, several countries around the world are experiencing an increasing inflation rate. The event is characterized by a decrease in the purchasing power of currencies. As such, inflation creates a significant difference in the value an individual spends today and in the future. As of February 2022, the USA recorded a 7.9% increase in its inflation index. In order to prevent this occurrence, governments need to search for other alternatives that can combat their devaluing currency. The common strategy that countries apply is hedging the fiat currencies against hard assets such as gold. By definition, hard assets are financial instruments that can maintain their value over time. Bitcoin, being a hard asset, could gradually become an appropriate hedge against inflation. This article will provide an insight into how Bitcoin can aid in reducing a nation’s inflation level. 5 Ways Bitcoin Can Curb Inflation Bitcoin is currently the leading digital asset with a market cap exceeding $700B. Its ability to function in a decentralized peer-to-peer network is making BTC a favorable financial instrument. Asides from that, the digital asset offers several advantages such as security and transparency, which contribute to its popularity. In that regard, Bitcoin could help mitigate inflation in the following ways: A Fixed Supply Data shows that Bitcoin has an overall supply of $21M BTCs. Today, 90% of the virtual currency is already available ...