Topic: BTC and Time value of Crypto curency (Read 161 times)

In this context I think it varies based on being reliable and a safeguard against inflation, when we look at the decentralized nature of Bitcoin we know that it operates independently regardless of government policies and procedures which makes it stand out and be as a hedge for fighting inflation and again checking the volatility you'll definitely know that Bitcoin Price changes with time and this make it not suitable as hedge over inflation as well, so this two scenarios should be taken into consideration when thinking Bitcoin can really stand as a hedge over inflation. But possibly if there's a fixed price for Bitcoin rather than fluctuations it could remedy this menace of inflation a whole lots and I think the government should see reasons with adopting the use of Bitcoin that way there would be measures to eradicate this inflation and live everything at balance.

Unless hodlers like Satoshi that may never sell, I have noticed rapid decrease in the number of bitcoin most other bitcoin whales hold. For instance, hodlers who had 5k btc 10 years ago may now have 300btc. Most whales lose out a lot of their bitcoin, due to bitcoin's high rate of demand. That is, the valued amount of fiat they'll attain after gifting out their bitcoin.

Subsequently, only a few number of holders can possess more bitcoin as they had in the past. While they sell, they'll hardly have enough fiat to buy again. Hence, any bitcoiner who has in mind to sell their asset will have to think of it as a reserve. Because they'll have to exchange back to fiat and still face the inflation.

You are right; with so much fiat money being printed these days, the capped supply of Bitcoin should make it a good hedge against inflation. But from what I can see in this data, volatility in Bitcoin is pretty big. Just take 2023 alone, it has seen more than one price swing above 30%. This will send away any investor seeking some form of stability.

Though Bitcoin might seem an excellent hedge against inflation today, sentiments suddenly turn around in the market due to some decisions taken by the government, for example. Like the one taken by the SEC on crypto regulations, it can change everything. With its regulations getting more stringent, things might get even more volatile than stable. Though it does have potential, we really can't dismiss these extrinsic factors that affect its value over time.

Gold is the best asset to hedge against inflation, this has been proven for thousands of years and recognized by the whole world, only bitcoin investors think that bitcoin is better than gold in terms of inflation hedge.

Many people will not like to hear this naked truth but this is something I have said many times. Bitcoin is still being used as a speculative asset, it is not a store of value or a safe haven as many people think.

Theoretically, given bitcoin's finite supply, it could be an effective inflation hedge, but based on what's been going on, it's clearly more suited as a speculative asset.

so far bitcoin's journey for more than 1 decade has shown that bitcoin has proven to be a hedge against inflation, although it has quite significant price fluctuations and makes the idea that it is not worthy as a hedge asset, but that argument is indeed appropriate only that it can be seen in the short term, but if you look at the long term bitcoin has succeeded as a hedge, if you refer to the bitcoin cycle then you will find that bitcoin has succeeded as a redistribution of wealth and is resistant to price inflation even though it has high volatility as an asset, each cycle creates a new high price, but for altcoins or crypto it cannot be said that way because the majority of them have turned to bitcoin and Fiat currency as a hedge.

Bitcoin's value has increased significantly over the years, but that's not enough to suggest that it will be an effective inflation hedge. It's only been around for 15 years and hasn't experienced any major events like a global recession, or war...we don't even know if it could survive if those things happened. Not to mention, it is even heavily dumped when inflation occurs or is too sensitive to news. How can it be said that it is a good inflation hedge.

What guarantees that it will continue to exist or continue to increase in value in the coming decades? Meanwhile, it took thousands of years for gold to prove its worth as an inflation hedge. Inflation hedges must be assets that guarantee value, are safe, legal...especially when the world falls into recession, crisis, or war...not assets that are dumped and manipulated.

With a fixed supply of 21 million coins, bitcoin is quite a promising cryptocurrency. It is, however, just like digital gold. The savings model might be worthy of the pursuit of those seeking alternative money and the central banks. Especially in times of economic uncertainty.
But here, there is one pending issue with the Bitcoin and it is the scalability of this bit. Prices shoot up rapidly in the short term. That again largely depends on market confidence factors as well. Regime news and macroeconomic shocks These reforms may weaken the potency of good stores of value, for instance, even as they shield from recessions over the long-term horizon. However, many reforms in the short-term horizon are able to cause investors to lose considerably. and renders stability in the hands of the seeker unsatisfactory.

In Bitcoin, it is somewhat different, due to the TVM. Regular investments yield returns over time. In order to compensate for inflation and risk, with Bitcoin its speculative nature can very well lead to higher returns; however, there also exists the risk that the returns will diminish. One can treat it like a long-term investment. Short-term fluctuations, however, challenge that view.


It is interesting because you pinpointed where gold historically served as a strong hedge against inflation. However during the periods of financial contraction especially, returns generated by Bitcoin can be very high. While it surely had many fluctuations during that period, But that is also what appeals to people who want high growth. With stability, of course gold provides But long-term profits arising in the case of Bitcoin will attract risk lovers. The whole thing depends on the financial goals of the individual. Whether it is emphasizing safety or gaining maximum returns in the due course of time.

The reason why it could be an effective hedge against inflation is its scarcity which fiat doesn’t have. There are more and more money being produced now and the inflation is higher than ever. I do believe that over time, bitcoin may become less volatile and more stable. Just in recent years, its price is not swinging as much compared to back then. Yes it is still volatile and unpredictable but the levels it takes are not as low as before.

If we adopt bitcoin more everywhere, there’s a possibility that it would be a more effective hedge against inflation.

Gold is still the best asset to hedge against inflation, currently dollar value is dropping and now gold price is rising so high in the last few months.

I'd consider Bitcoin is more like a speculative asset, in the last few months, Bitcoin returns is bad. But, if you compare the last 2 years performance, Bitcoin already make 3x return if you hold it till now.

Since I'm not only looking to hedge against inflation, instead trying to earn more, I'd choose Bitcoin over gold for long term holding.

[CHART] Bitcoin Inflation vs. Time
How is the 21 Million Bitcoin Cap Defined and Enforced?

You will easily see big differences by comparing charts of Bitcoin total supply and M1 supply of the USA.
https://fred.stlouisfed.org/series/M1SL
As consequence of massive money printing since Covid-19, but this actually has badly printed for many decades, purchasing power of US. dollar drops dramatically and the US. nation debt soars.
https://www.usdebtclock.org/world-debt-clock.html

As actual investor, you will not care about short term changes and focus on long term growth that is not volatile.
https://charts.bitbo.io/yearly-candles/

You misunderstood about value and price. Value is solid and it's not volatile while price is fluctuating or volatile. The key is value comes first and price comes later as a reflection of value and expectation, speculation of many people in the market. Price is more sensitive to news, fud and it can create many emotional reactions on the market like FOMO, and panic sells.

As long as the related encryption maintains it's safe status, not broken by super-computers, and there are no other fatal flaws, then Bitcoin will be a great safeguard against inflation for a very long time.

spring 2021 68k
 fall 2024    63k
bad for inflation

So it matters when you pick

btw 10 years ago btc was about 300-400 in sept of 2014 ( need to check that) not 1000 so it was way better than you said.

i googled btc price for sept 20 2024 and the number is ⬇️
on sept 20 2014 btc was 409 to 431 so it was great way better jump than 1000 to 63000 it was say 420 to 63000

It may but will still depend on how we want it to be. The market might be very volatile and will not make that happen that easily. But if we begin to view it as a technology to cut hedge inflation, it’ll be great. I think it’ll up to us when we view it in that manner for it to serve that purpose and work for us for that purpose.


We have made it look so and I don’t think that intuition is going to change in many of the hodlers mind. We tend to see it more as an investable asset and not just a reserve funds we can get back at when there’s an inflation. If you can see the discussions around the forum, it’s mostly on how this holders can be profitable while holding on to their bitcoin for a long time and not a discussion based on alternative funds you can rely on when there’s inflation.

Yes and this have always been the norms, we should go back to the history and discover upon several years whereby inflation of looming on the fiat financial economy and the people are losing from it, while on bitcoin network, all you could see is the way that the things are fast changing as more than we could aspire because of the increase in the adoption, its not all about the fear of the volatile market anymore now, but the fact that investor are having something big they can earn through from bitcoin adoption, which fiat or inflation couldn't overcome.

Believe it or not, Bitcoin have proven to be a nice hedge against inflation. You can do the simple mathematics. Check $1,000 worth of Bitcoin ten years ago against today's value of the same quantity and see if the $1,000 in Bitcoin and $1,000 kept in fiat from that time is the same. You will see that the purchasing power of the fiat has diminished whereas the $1,000 Bitcoin would have been worth a fortune now. This shows how great Bitcoin is as a great hedge against inflation that is inherent in the fiat system.

Considering the volatile nature of bitcoin price I'd rather prefer using it as a reserve than a hedge. Though the both are quite similar, but the hedge type of perspective can lead to disappointments. Because the holder's expectations may not be met, due to economic changes.

Therefore, upholding bitcoin as a reserve like the US government are planning on doing, could be necessary, such that when fiat faces higher rate of inflation, you'll have a back up fund saved in bitcoin. It's not meant to be some kind of investment that you should completely hope on to fetch you profits, anything can happen.

Bitcoin's limited supply and decentralized nature make it a potential inflation hedge, but volatility and external factors impact its effectiveness. Will Bitcoin ultimately prove to be a reliable safeguard against inflation?

This Conversation should fellow the view of BTC and the time Value of money relating it to crypto currency and value fluctuation.