Topic: Bitcoin and Inflation and why bitcoin? (Read 275 times)
I had nearly 2 bitcoin in my history transaction.The transaction includes the buying and selling of crypto currency.I had earned huge bitcoin as a payment in many signature campaign.In 2017,their was huge number of bitcoin based campaign.But the mistake I had made is spend 2 bitcoin then and their.I don’t have any bitcoin in my savings wallet.I don’t know the price of bitcoin will cross the 20k dollars.But it had crossed the 65k dollars and made many billionaires because of that pump.
Bitcoin's deflationary structure is number 1 reason for me to buy it when I first learned about it. I was proven right after that and Bitcoin clearly goes up and up through time, its crashes are mainly short term issues. Bitcoin's purchasing power will always be more strong than all fiast moneys, into future. It is best to borrow money using fiat money and invest in Bitcoin, literally. You will cover your debt eventually in long run. It never changes that much. Even if markets do good, Bitcoin will do even better.
I think that the statement of Bitcoin vs Inflation Bitcoin will always win, not only because Bitcoin is deflationary, but also because other things could happen in Bitcoin, the deflationary term is something very complicated for some people who do not know much about economics, because they see it only as an affirmation against inflation, maybe yes, but it goes beyond what it is, fiat money has no limit, new bills are always being issued, and as long as that happens the value of money will fall, not bitcoin, the bitcoins that have been lost, are lost and that's it, there is no going back, and that makes them value more, whoever has 1 bitcoin will be a billionaire in the future.
@Jawhead999
Price is not linear but has cycles. Now is the down swing.
Still is the long run it is expected to rise and in average should be a good hedge.
@mindrust
For short term having useful items is wise advice, both from the price but also should there be problem with supply in some crises.
Still in the long term having too much of those items is not practical, so when looking where else to save money and invest.
For those you need scarcity, so my take is: Bitcoin, Real estate, Stocks.
Price is not linear but has cycles. Now is the down swing.
Still is the long run it is expected to rise and in average should be a good hedge.
@mindrust
For short term having useful items is wise advice, both from the price but also should there be problem with supply in some crises.
Still in the long term having too much of those items is not practical, so when looking where else to save money and invest.
For those you need scarcity, so my take is: Bitcoin, Real estate, Stocks.
We are in a time of crisis and I have to say that inflation is so high, it affects everything. A lot of people have been expecting bitcoin to exert its anti-inflation properties, and then things didn't go as expected, assets like bitcoin are not immune to short-term negative effects. I see that many people are starting to be negative and skeptical about bitcoin's ability to fight inflation.
But if we don't just look at the short term but look at the long term, looking to the future. We'll see what bitcoin can do.
+ In 2010: with 10,000BTC we will buy 2 pizzas.
+ In 2016: with 100BTC we can buy a car.
+ In 2022: with only 10BTC we will buy a house, maybe many countries will not need 10BTC to own a house, sometimes only 3BTC to 5BTC.
But if we don't just look at the short term but look at the long term, looking to the future. We'll see what bitcoin can do.
+ In 2010: with 10,000BTC we will buy 2 pizzas.
+ In 2016: with 100BTC we can buy a car.
+ In 2022: with only 10BTC we will buy a house, maybe many countries will not need 10BTC to own a house, sometimes only 3BTC to 5BTC.
The value of bitcoin will only rise as time goes on, people will realize the value of bitcoin if they don't already.
I think BTC has the potential of reaching a 5 Trillion market cap in the next 10 years.
Those 10k bitcoin pizza story is also mind boglin~
Sentiment related to inflation continues to strengthen and rage is still one of the factors that move the US and global financial markets, because the threat of inflation is certain to make the economy more real overheating, but the majority of major cryptos are turning green even though the world is experiencing inflation, Bitcoin tends to stay in the zone. psychologically, when the latest inflation was released the crypto market was only slightly affected and continued to strengthen even though the movement still tended to be limited,
Anything but the dollar...
Bitcoin is fine but it wouldn't be my first choice to protect myself against the inflation. I would rather buy durable goods which you can store for a long time like toilet and copy printer paper, paper towels, dry food, canned foods, some water, home repairing stuff (drills, screwdrivers) or any kind of repairing stuff, back ups for your current electronic devices in use (computer parts, cameras etc), household appliances (if you have an old device, it might be wise to have a back up)
These stuff I mentioned above are the things which you most likely will need in the future.
Gold, silver, crypto you probably won't need these in your daily life. Some people will need them yes, but not you.
Bitcoin is fine but it wouldn't be my first choice to protect myself against the inflation. I would rather buy durable goods which you can store for a long time like toilet and copy printer paper, paper towels, dry food, canned foods, some water, home repairing stuff (drills, screwdrivers) or any kind of repairing stuff, back ups for your current electronic devices in use (computer parts, cameras etc), household appliances (if you have an old device, it might be wise to have a back up)
These stuff I mentioned above are the things which you most likely will need in the future.
Gold, silver, crypto you probably won't need these in your daily life. Some people will need them yes, but not you.
So you're talking if Bitcoin is hedging against inflation, isn't? then explain to me why at the current situation where inflation is really high and fiat value always decrease, Bitcoin price doesn't increase? actually Bitcoin price is decreasing too. If Bitcoin is hedging against inflation, Bitcoin price already high and would back to $50K at least. You need to understand and explain about Bitcoin and inflation rate in the current situation, not only the past history.
Here is my blog, contribution to the question Why Btc:
https://infopedia.io/revolution-of-money/
(r)Evolution of Money
(Money and Payment systems of tomorrow - Bitcoin rise with crypto industry story)
https://infopedia.io/revolution-of-money/
(r)Evolution of Money
(Money and Payment systems of tomorrow - Bitcoin rise with crypto industry story)
The inflation rate is rising all over the world and that's what we are all sure about it, during the last few years the food price was always increasing and the money we hold is losing its value against many other assets and even the products we needfor our lives, in the other hand the price of bitcoin in uptrend in long and mid-term and this difference between bitcoin price and the inflation rate can be very much surprising for the people who are not familiar with the market and this can be a good chance for the investors to save themselves from the inflation.
The funny thing of 2022 is that none of the traditional asset classes protected us from the rising inflation so far. Stocks were hit pretty hard and are down 30% on average, usually stocks can atleast partially withstand inflation pressure, not this time. Bonds were also a bad investment because of the rising interest rates. And even gold the number one inflation hedge back in the day is down considerably from its 1900 USD levels. Investors must have all swapped into cash, what seems as a pretty bad idea with inflation rates at 10%. With that in mind bitcoins and other crypto currencies is one of the few good ideas to protect ourselves from inflation. The price drop we saw over the last several months is giving us good entry prices to top off our holdings. I rather trust in bitcoins than in gold or silver to protect our money from inflation.
What you are trying to explain is not inflation but demand effect, so your calculation will not be accurate as the time interval is optional according to the price, you did not measure based on a specific commodity and the focus ignored many aspects, so you are comparing the importance of adoption in increasing the value of Bitcoin more than the fact that Bitcoin as tool to fight inflation.
As for the reason for bitcoin's failure at the present time, it is because of the small market capacity, we are still in the early days and we need a lot of time to rise.
As for the reason for bitcoin's failure at the present time, it is because of the small market capacity, we are still in the early days and we need a lot of time to rise.
I think there's a need to clarify something here, bitcoin increases value over time and this is not inflation at all but retaining the quality in value with respect to time, inflation hit the fiat economy whereby the same value fiat money had over time is still what it is now, or even depreciated and that's why you discover what one USD can afford buying five years back will now requires about fifty USD in present time, but bitcoin operations is opposite to this just as OP has explained it on the diagrams, bitcoin value increases with time.
The value of Bitcoin does increase over time, but you should also note that the increase in the price of Bitcoin is also based on the amount of demand in the market, so it will not always increase if one day the demand for Bitcoin decreases.
Close examples like last year and now where the price of Bitcoin is still rotating at $19K to $20K, while for the highest price last year it was $60K although the price didn't last that long for a unit of Bitcoin, but at least Bitcoin was at that price. So is that also called an increase in value over time for Bitcoin?
Diversifying assets in the high inflation and economic recession time is what I expect people would do right now. You want to put some at gold, and some USD at the bank cause of high-interest rates. The rest could be in long-term stocks from good companies.
Bitcoin can also get a fair share amount of what people put their money into diversifying above. It was really a no-brainer move here. As long as they have a stable income and no debt on their name, of course. Cause you can't afford to be leisurely at investing, to be diamond hard when things like debts, make ends meet puts pressure on you and your assets.
Bitcoin can also get a fair share amount of what people put their money into diversifying above. It was really a no-brainer move here. As long as they have a stable income and no debt on their name, of course. Cause you can't afford to be leisurely at investing, to be diamond hard when things like debts, make ends meet puts pressure on you and your assets.
I think there's a need to clarify something here, bitcoin increases value over time and this is not inflation at all but retaining the quality in value with respect to time, inflation hit the fiat economy whereby the same value fiat money had over time is still what it is now, or even depreciated and that's why you discover what one USD can afford buying five years back will now requires about fifty USD in present time, but bitcoin operations is opposite to this just as OP has explained it on the diagrams, bitcoin value increases with time.
The problem is that bitcoin price is not decided based on its value but instead it is decided inside centralized exchanges. Considering the fact that the order books aren't that packed inside these exchanges (which makes the market small in comparison to others) and the fact there we have a lot of weak hands who thought bitcoin was an asset and was supposed to make them rich overnight, we can pretty much expect very volatile market where it gets dumped for no reason during times of economical crisis.
But the fact remains that bitcoin is deflationary due to its capped supply and considering that the adoption of bitcoin is constantly increasing the price should go up in the long run and we are currently behind schedule for that rise...
But the fact remains that bitcoin is deflationary due to its capped supply and considering that the adoption of bitcoin is constantly increasing the price should go up in the long run and we are currently behind schedule for that rise...
Up untill 1637 tulip seeds were also a great inflation hedge?
Because all you (OP) mentioned in your post is a past performance and weakness of fiats. Tulip seeds also performed great for 3 years.
I did not know that 1971 was "ancient times", when president Richard Nixon ended U.S. dollar/gold peg.
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Bitcoin is better than gold. Its easier to store, easier to transfer, easier to use, easier to divide even to cents and has better stock/flow ratio which will not change after price pump (gold supply will pump after 10x price pump because it will be profitable to mine gold from sources that were unprofitable before) . That's why it may work as good inflation hedge but not for those who bought the top. And we don't know where real long term value is. It may be at 50k$ and we are way undervalued. It may be at 1k$ and we are way overvalued.
Because all you (OP) mentioned in your post is a past performance and weakness of fiats. Tulip seeds also performed great for 3 years.
Indeed, if you look at money from ancient times up to now, it is indeed much different in its purchasing power
I did not know that 1971 was "ancient times", when president Richard Nixon ended U.S. dollar/gold peg.
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Bitcoin is better than gold. Its easier to store, easier to transfer, easier to use, easier to divide even to cents and has better stock/flow ratio which will not change after price pump (gold supply will pump after 10x price pump because it will be profitable to mine gold from sources that were unprofitable before) . That's why it may work as good inflation hedge but not for those who bought the top. And we don't know where real long term value is. It may be at 50k$ and we are way undervalued. It may be at 1k$ and we are way overvalued.
Buy bitcoins before it's too late.
https://twitter.com/BTC_Archive/status/1576954888184950785
This is sad, when people retire thinking they saved enough, then they face this kind of unfair inflation realising it’s the begging of the bad time, People don’t care how much you know until they know how much you care. We want to save as many people from financial ruin as possible. Quote
7 years ago 55,000 Turkish Lira got you a Volkswagen.
Now an iPhone 14 costs 57,000TL.
👉Buy Bitcoin before you need it!
Now an iPhone 14 costs 57,000TL.
👉Buy Bitcoin before you need it!
https://twitter.com/BTC_Archive/status/1576954888184950785
If we're making the conclusion that bitcoin is an inflation hedge just because it performed really well, then are high growth tech stocks that performed really well(and similarly as bitcoin) throughout the years also considered an inflation hedge? I don't think so.
Yes, indeed, people perceive inflation in bitcoin subjectively, depending on their entry point, you can imagine yourself as a buyer of bitcoin in November 2021 and then you will probably consider that your funds have depreciated. However, if you look at bitcoin throughout its history, it becomes clear that it is a more inflation-resistant asset and has 1.8% annual inflation, which makes it more preferable compared to fiat money.
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