Bitcoin Not a Hedge Against Inflation??

justdimin

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Quote from: wafgsauif on August 10, 2022, 02:10:03 AM

Despite the volatility in the bitcoin market now, bitcoin is a good hedge against inflation, and now most of the traditional investments are broken, and people want to build wealth by owning something of value.

I do agree that the price may be low right now, but that doesn't change the fact that bitcoin will be going up against dollar a lot in the near future and when it does that it will be very profitable for all of us. That type of "imminent increase" always makes it feel like we are in a situation where it is definitely a profitable thing to hold.

Inflation may have beaten us during this past few months, but it's going to lose in the long run. Just to make it clear, if you have 100k, which worths about as much as a house, then you may want to buy a house with it, but in the next 5 years, bitcoin will be more valuable than that house, or anything else you could buy with it.

wafgsauif

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Despite the volatility in the bitcoin market now, bitcoin is a good hedge against inflation, and now most of the traditional investments are broken, and people want to build wealth by owning something of value.

Besbecob

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No, bitcoin is not subject to inflation - it's just that it was bought a lot by big players who are now hedging at the expense of it

HardFacts

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Quote from: worldtraveller321 on June 13, 2022, 03:40:20 PM

Bitcoin was in some aspect created to act as a hedge against inflation. More or less it's value was supposed to go up as FIAT value goes down.

BitCoin LIES have been changed constantly over the years....

Bitcoin is the new money, will be used for every day transactions.

Bitcoin is digital Gold.

Bitcoin is a hedge against inflation.

Etc. Etc.

There is NO LIMIT to the dishonesty and delusion of people that want to get rich from BitCoin.

stompix

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Quote from: hatshepsut93 on June 14, 2022, 06:43:30 PM

This depends on what type of investors is responsible for the largest share of volume in Bitcoin market. If it's people who live from paycheck to paycheck, then yeah - any economic crisis would mean no spare income to dump into Bitcoin. But if its middle class with some savings, even during crisis, or millionaires and billionaires, then they could buy Bitcoin at any time, but choose not to.

So, basically, bitcoin is going to "save" the ones that have enough money to spare during a crisis, just how a lifeguard would bring you a drink while you stand by the pool ignoring the poor bastard that screams 100 meters away in the ocean. Grin

It's always funny for me when some guys on this forum (not you!) are speaking so greatly about this revolution that will make everyone's finances better, punishing those dumb billionaires, ignoring entirely that for any assets, commodity, currency to rise in price and bring a profit you needs those that have more money than you to offer you a better price. When that money is not there, well we have this!

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Quote from: worldtraveller321 on June 13, 2022, 03:40:20 PM

Bitcoin was in some aspect created to act as a hedge against inflation. More or less it's value was supposed to go up as FIAT value goes down.
Here we are in a state of massive inflation bubble happening right now.
Many of us got Bitcoin years ago as for it to be something that would go up in value and give people better level of wealth, or at least at as a survival key.

However it seems with FIAT going down, so is more of Bitcoin and other cryptos.

Why is this happening?

Bitcoin was supposed to be here for our survival. Now it is becoming just a digital number on a computer screen that never had any value all along.

What am I missing here?
or is the best yet to come?
look to hear your thoughts?

One thing we have to note is that Bitcoin is a financial instrument and volatility do happen either to the forward direction or the downward side. Bitcoin has a lots of risk due to it volatility and liquidity. When inflation had taken over virtually all the economy in the world due to the effects of COVID that has crumbled our economy. The market will always go down which depends on the market volume and liquidity. I can see that this is the time the market had decided to go bearish and I am not surprised about what is happening now.

bitzizzix

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My answer doesn't want to relate to some of the news that has happened so far, but most investors see bitcoin as an opportunity to beat inflation and thus put their money in it.
while some people want to make a profit, and others see a quick way to increase their wealth.
However, there are others who see it as a store of value, but most of them would agree that cryptocurrencies, especially bitcoin, are a good hedge against inflation, because when inflation goes up, the value of money depreciates.

RealMalatesta

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It is against inflation; it is not against recession. The problem is that we are in a situation where recession could take place, and it will be a terrible market for a while and everyone will lose money all together, in order to make sure that inflation doesn't happen again. When the world has tens of billions of dollars more on top of what they already have, that creates inflation and we had money printing during covid period hence why we had inflation.

Now the FED and all related places in other nations increases the rates, hence why money is withdrawn from the market, so there is no excess, this includes taking it out of stocks, gold and of course crypto as well.

ChiBitCTy

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Quote from: Gyfts on June 15, 2022, 10:45:27 AM

Quote from: worldtraveller321 on June 13, 2022, 03:40:20 PM

However it seems with FIAT going down, so is more of Bitcoin and other cryptos.

The entire market is down, no matter the industry. Real estate seems to be the only market that hasn't taken a massive hit yet, and there's a lot of speculation amongst the experts that there's an artificial bubble being created even in tangible assets which will eventually pop. USD/EUR hasn't experienced this type of inflation in decades. Bitcoin didn't exist yet when this type of inflation was last seen. We don't actually know how crypto is supposed to react with high inflation rates, the data is not there.

That is well said. Everything is down at the moment and of course a new asset class, a new technology, is not something that can easily hold its value in the early days. You're right about the housing market, while it is almost the only asset class that hasn't gotten crushed (precious metals to an extent as well), I do know it's starting to cool off it's self now.

Gyfts

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Quote from: worldtraveller321 on June 13, 2022, 03:40:20 PM

However it seems with FIAT going down, so is more of Bitcoin and other cryptos.

The entire market is down, no matter the industry. Real estate seems to be the only market that hasn't taken a massive hit yet, and there's a lot of speculation amongst the experts that there's an artificial bubble being created even in tangible assets which will eventually pop. USD/EUR hasn't experienced this type of inflation in decades. Bitcoin didn't exist yet when this type of inflation was last seen. We don't actually know how crypto is supposed to react with high inflation rates, the data is not there.

avikz

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Quote from: worldtraveller321 on June 13, 2022, 03:40:20 PM

Bitcoin was in some aspect created to act as a hedge against inflation. More or less it's value was supposed to go up as FIAT value goes down.

Did Satoshi Nakamoto tell you that? Bitcoin was never created as a hedge against the fiat currency and inflation. Bitcoin was purely created for one reason - people get to control their own finances without any third party intermediary. It has nothing to do with inflation or any other global economical issues.

However, when bitcoin became popular people find it more attractive as an investment because it has shown immense potential. But bitcoin's price was never supposed go up when the global market is down or vice versa. It happened couple of times in the past, but that's pure coincidence.

hatshepsut93

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Quote from: stompix on June 14, 2022, 03:56:15 AM

Yeah, everyone says to buy when there is blood on the streets but what happens when that blood is everywhere because everyone is dead? Easy to say cheap coins, let's buy but with a lot of people afraid of what happens next month it's for many cheap coins or food.

This depends on what type of investors is responsible for the largest share of volume in Bitcoin market. If it's people who live from paycheck to paycheck, then yeah - any economic crisis would mean no spare income to dump into Bitcoin. But if its middle class with some savings, even during crisis, or millionaires and billionaires, then they could buy Bitcoin at any time, but choose not to.

Darker45

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I don't know, you're probably missing the fact that inflation is a constant. It is a regular thing. It happens continuously. It is there all the time because it is designed to be an integral feature of fiat. That is not a thing with Bitcoin. Although Bitcoin's price is volatile, it is not designed to permanently lose value over time. The fact that Bitcoin goes through temporary dips doesn't mean that it failed.

I hope I'm wrong but it seems you are disappointed with the way Bitcoin is moving right now, thereby losing sight of the bigger picture. It doesn't mean that since Bitcoin experiences bearish seasons, it has already lost its purpose. I'm happy that Bitcoin is like this rather than it doubles its price everyday.

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Quote from: worldtraveller321 on June 13, 2022, 03:40:20 PM

Bitcoin was in some aspect created to act as a hedge against inflation.

You've got it wrong, sorry. Bitcoin was created in order that you and me can make transactions easily without needing to trust + use Visa or the banks to validate that.

Quote from: worldtraveller321 on June 13, 2022, 03:40:20 PM

However it seems with FIAT going down, so is more of Bitcoin and other cryptos.

While this indeed happens now, it's not a relation, it's a coincidence.
Bitcoin price tends to go down after a couple of months after the ATH. Then, after some years, new, higher ATH came. It has already happened a couple of times.

Quote from: worldtraveller321 on June 13, 2022, 03:40:20 PM

Bitcoin was supposed to be here for our survival. Now it is becoming just a digital number on a computer screen that never had any value all along.

What am I missing here?

You have thought that Bitcoin is a get rich scheme. You thought that Bitcoin price only goes up. You.. didn't read enough before investing into bitcoin.
You could start by reading about Bitcoin's 4 years cycles. Ah, and Bitcoin white paper: it's short and not too technical, it may give you a better view what was Bitcoin invented/created for.

ChiBitCTy

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A buddy I grew up with asked me this same question last night. I think it’s important to remember we are still in the “first inning” when it comes to bitcoin / cryptocurrency and it’s progression. There are still a lot of people who don’t own bitcoin , a lot of skeptics, lots of things the network is trying to iron out etc. Gold and Silver have acted as a currency for thousands of years, everyone knows it and appreciates it for that reason. Remember bitcoin was only just created in 2008.

Leviathan.007

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The problem with your opinion is your look is short and mid therm, not longtime period. if you analyze the bitcoin in the short and your analysis consider everything in short term you can see stuff like the price bubble in bitcoin and you will be worried about the price of it also in short term sometimes the price can be even a bad situation not a hedge against inflation while that's not specifically about bitcoin and if you do this compression in some other market you will see the same results. During the bearish phase of bitcoin, we will see many topics like this and this is normal in this situation of the market,

Lucius

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Imagine a situation where someone who has been a member of this forum since 2017 asks this question - then let's ask ourselves if 10% of Bitcoin owners even understand what they actually have if they have their private keys? I would conclude without any hesitation that Bitcoin is not something to be blamed, it is the fault of people who try to turn it into a money-making machine and do not give up on anything in their goals.

For all those who want only profit, they needed to learn when it's time to buy and when to sell - it's no secret, although it requires the use of the brain on a slightly higher level than that used by today's man.

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Quote from: worldtraveller321 on June 13, 2022, 03:40:20 PM

Many of us got Bitcoin years ago as for it to be something that would go up in value and give people better level of wealth, or at least at as a survival key.

I can't seem to understand what you are saying. If you truly have bought Bitcoin years ago, even if you have bought around the last ATH $20k you would still be bullish with the current price.
I would have also thought you understood that every financial market has its Bulls and bears and Bitcoin and the general crypto market are no different so don't expect that because the financial markets are going down means Bitcoin should continue to go up however if you do look at the cryptocurrency market or Bitcoin in particular over the past 10years vs other financial markets then you would see the difference in ROI within this periods. Always think long-term with your Bitcoin investment.

stompix

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Quote from: hatshepsut93 on June 13, 2022, 05:45:11 PM

The theory is because Bitcoin's supply is fixed, it must go up when fiat goes down. But the reality is not so simple, there are many factors that determine Bitcoin's price, and fixed supply is only one of them.

As far as I see this for me the theory is simple. People have more money to invest they put more money in Bitcoin, people have less money to invest or in the extreme case, they run out of it they no longer buy coins but sell them. Inflation just accelerates things, everyone was saying in an economic crisis with an incoming inflation rush for real estate, I've seen with my one eye how this did NOT work a decade ago with everything crashing around.

Yeah, everyone says to buy when there is blood on the streets but what happens when that blood is everywhere because everyone is dead? Easy to say cheap coins, let's buy but with a lot of people afraid of what happens next month it's for many cheap coins or food.

Quote from: Despairo on June 13, 2022, 11:35:18 PM

Can you pointed out to me where did Satoshi said Bitcoin was created to hedge against inflation?

Satoshi didn't say a lot of things about bitcoin but people like to fantasize about what it was created for, in reality, it was just a p2p currency, ironically enough, almost everyone ignores the actual purpose it was built for and seeks to reinvent it by adding a ton of things no currency will be able to solve.

But it's understandable, a lot want to be millionaires by holding 100 satoshis, you've got to market the shit out of it.

noorman0

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Quote from: worldtraveller321 on June 13, 2022, 03:40:20 PM

-snip-
Many of us got Bitcoin years ago as for it to be something that would go up in value and give people better level of wealth, or at least at as a survival key.

Bitcoin is still not valid in some places (in countries that have not legalized it). If bitcoin is an option as a hedge against inflation and crises it is wrong (for now). The fact is that people's daily needs continue and they have to use the "accepted" currency under any economic circumstances.

vennali

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It was in a way, intended to be a hedge against traditional markets and assets and be used by public but, with the involvement with large institutions, it has turned into something very similar to the market we were supposed to be hedging against. At least that's my theory. At this point, all the markets are interconnected. Only once all the BTC has been mined and the demand keeps up. We might actually reach a stage where we are free of heavy market manipulation and Crypto/Bitcoin actually turning into a hedge.

ObscurePen

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Bitcoin is largely an asset. It follows supply and demand dynamics. Now it is deflationary as mining reward halves every 4 years, but if the demand for BTC is not maintained then price will fall. Thats what is happening.

You also have to look at mining power which I suspect would be reduced these days with random regulations and of course energy price inflation.

At the moment we also have a lot of companies ready to liquidate their Bitcoin due to sudden depreciation of its value. This is just gonna keep pushing price down.

There is no easy way in life to make money. This is true for Bitcoin. It's not some magic thing that will keep going up and up and up. It's an asset and buying it has risk, crazy risk. It's up to you to take that risk.

NotATether

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I have said this in another post as well, it's because there is a feedback loop where the people selling their coins are doing so because the price has previously gone down during inflation (as a result of previous traders selling their coins).

Now obviously this feedback loop has to have a beginning to it, and I can trace it it the moment when some people (wrongly) thought that Bitcoin would go down with the inflation, so they anticipated that by selling their coins, and their actions helped to cause the drop that they had feared.

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Quote from: worldtraveller321 on June 13, 2022, 03:40:20 PM

Bitcoin was supposed to be here for our survival. Now it is becoming just a digital number on a computer screen that never had any value all along.

What am I missing here?

No, you were just told that BTC was created to hedge the inflation. It was actually created to milk the simple-minded.

Anonohmon

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It is if you play the long game. People who bought btc at 1000 dollars a decade ago watched in horror as the first major bull market turned bear. imagine putting 1000s of dollars just to watch it turn into 100s. No doubt many people sold and lost out. But the ones who held are now legends among men. They are millionaires now.

Despairo

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Can you pointed out to me where did Satoshi said Bitcoin was created to hedge against inflation? You can search on both Bitcoin whitepaper and his posts in this forum. Bitcoin do can hedge against inflation, but you shouldn't expect all on all situations Bitcoin price will always increase. Bitcoin price are determined between demand and supply, you can't control the demand since it's depends on all traders/buyers.

If you don't believe Bitcoin can hedge against inflation, you can do research how much Bitcoin worth on 10 years ago and right now, compare with how much USD worth on 10 years ago and right now.

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Quote from: worldtraveller321 on June 13, 2022, 03:40:20 PM

Bitcoin was in some aspect created to act as a hedge against inflation.

Wrong.
Bitcoin was created as an alternative to the corrupt centralized financial system so that people have another choice for a currency.

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More or less it's value was supposed to go up as FIAT value goes down.

That still holds true but in long term not short term and when market manipulation is at an all time high.

Quote

Many of us got Bitcoin years ago as for it to be something that would go up in value and give people better level of wealth, or at least at as a survival key.

Well as I've been saying for the past 8 years, bitcoin is not something you buy to make profit.

Quote

However it seems with FIAT going down, so is more of Bitcoin and other cryptos.

Other cryptos aka the altcoins have always been going down. For example ever since 2018 all altcoins without exception lost their value for example the biggest shitcoin of all times called ethereum has been sitting at half of its 2017 price against bitcoin. It was only bitcoin that not only went back up but surpassed its previous ATH.

Quote

Bitcoin was supposed to be here for our survival. Now it is becoming just a digital number on a computer screen that never had any value all along.

That's your view because you bought bitcoin to become rich. Otherwise bitcoin is exactly as it was back in 2009, a decentralized censorship resistant currency.

pkersey

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Gold hasn't done too well either. Crypto was driven up by covid money printing / speculation. Now the governments are soaking up all those excess dollars to try to rein in the hyperinflation they caused. Bitcoin was $3000 when covid hit. Why wouldn't it go back to $3000? I'll be nice, $6000. That sounds more reasonable. $22,000 is still way too high. And as for ethereum: the protocol makes no sense until the transaction fees are fixed.

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Quote from: hatshepsut93 on June 13, 2022, 05:45:11 PM

The theory is because Bitcoin's supply is fixed, it must go up when fiat goes down. But the reality is not so simple, there are many factors that determine Bitcoin's price, and fixed supply is only one of them. For the last few years Bitcoin demonstrated correlation with stock market and general economy. It wasn't a full 1:1 correlation, but whenever stock market crashed, Bitcoin usually crashed too, but eventually Bitcoin recovered regardless of stock market.

Today's crash is just like that - a short-term panic caused by the stock market. Sooner or later Bitcoin will recover, nothing has changed fundamentally.

What can considered as a hedge against inflation. It is something that never drops the investment value unlike the market. What we're experiencing here is completely against it. Just think of a person investing $27000 yesterday and today it is $22k. So, the limited supply makes it a hedge against inflation and this isn't effective all the time. The recovery happens for sure, and now the market is getting more dependent on the traditional market.

uneng

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Do your analysis taking the whole bitcoin period into consideration and not only one bearish market/crashed scenario. Bitcoin is doing well against inflation on long run, that is what matters.

About the currently situation you can be sure bitcoin has total conditions of recovering and hiting a new ATH at some point futurely, like it has already happened before, while the same can't be told regards fiat currencies which are constantly losing purchasing power within time.

hatshepsut93

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The theory is because Bitcoin's supply is fixed, it must go up when fiat goes down. But the reality is not so simple, there are many factors that determine Bitcoin's price, and fixed supply is only one of them. For the last few years Bitcoin demonstrated correlation with stock market and general economy. It wasn't a full 1:1 correlation, but whenever stock market crashed, Bitcoin usually crashed too, but eventually Bitcoin recovered regardless of stock market.

Today's crash is just like that - a short-term panic caused by the stock market. Sooner or later Bitcoin will recover, nothing has changed fundamentally.

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Quote from: worldtraveller321 on June 13, 2022, 03:40:20 PM

Bitcoin was in some aspect created to act as a hedge against inflation. More or less it's value was supposed to go up as FIAT value goes down.

Since Bitcoin is a decentralized digital currency designed to give us complete control over our assets, no government regulatory agency or financial institution may regulate or control the Bitcoin price in the same way that they do for FIAT currency.

Quote from: worldtraveller321 on June 13, 2022, 03:40:20 PM

What am I missing here?

I can't say but you need adequate trust and knowledge about what exactly the meaning of Bitcoin is, in order to give yourself hope that something will surely come our way somedays once we believe in Bitcoin and keep Holding our Bitcoin for such time.

Quote from: worldtraveller321 on June 13, 2022, 03:40:20 PM

or is the best yet to come?

The best is yet to come because many investors have placed their faith in Bitcoin by investing large sums of money in Bitcoin; small investors are also waiting for the best time. I have the impression that the journey has only just begun because Bitcoin has a long way to go before it is accepted globally as a means of exchange.

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Bitcoin was in some aspect created to act as a hedge against inflation. More or less it's value was supposed to go up as FIAT value goes down.
Here we are in a state of massive inflation bubble happening right now.
Many of us got Bitcoin years ago as for it to be something that would go up in value and give people better level of wealth, or at least at as a survival key.

However it seems with FIAT going down, so is more of Bitcoin and other cryptos.

Why is this happening?

Bitcoin was supposed to be here for our survival. Now it is becoming just a digital number on a computer screen that never had any value all along.

What am I missing here?
or is the best yet to come?
look to hear your thoughts?

Topic: Bitcoin Not a Hedge Against Inflation?? (Read 461 times)