Bitcoin Failed As Inflation Hedge? What The Current Global Situation Tells Us

Bitcoin has felt the consequences of war, just like the rest of the world. The current geopolitical situation generates uncertainty for both households and markets. The question of a million dollars for bitcoin seems to be whether it can still work as a hedge against inflation or has February proven the opposite. Geopolitics And Bitcoin A report by QCP Capital points out that, historically, the has been a poor correlation between BTC and Gold prices, which puts into question if the digital asset can be treated as a hedge against inflation to help protect the value of investments and individuals’ savings. Sanctions against Russia will be felt by everyone around the world. Global oil and gas prices have already surged and are expected to escalate further. Inflation increases as the economic consequences of the pandemic meet with a war. Investopedia explains that “Assets that are considered an inflation hedge could be self-fulfilling; investors flock to them, which keeps their values high even though the intrinsic value may be much lower.” For this reason, gold has been the go-to hedge against inflation asset for years. And bitcoin has been long-described as “digital gold”, but the little correlation between them during times of risk-off means the digital asset has traded more like “a high-beta leveraged risk asset with a strong correlation to Tech and NASDAQ.” However, there are more thi...