Why is Bitcoin considered a hedge against inflation?

3 answers

• Dec 17, 2021 · 3 years ago
  Bitcoin is considered a hedge against inflation because of its limited supply. Unlike traditional fiat currencies, which can be printed at will by central banks, the supply of Bitcoin is capped at 21 million coins. This scarcity makes Bitcoin resistant to inflationary pressures, as its value cannot be diluted by an increase in supply. Additionally, Bitcoin's decentralized nature and cryptographic security provide protection against government manipulation and control, further enhancing its status as a hedge against inflation.
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• Dec 17, 2021 · 3 years ago
  Bitcoin acts as a hedge against inflation because it is not subject to the same economic policies and monetary interventions as traditional currencies. Central banks can manipulate interest rates and print more money, which can lead to inflation. However, Bitcoin operates on a decentralized network and its supply is governed by a predetermined algorithm. This means that no single entity can control or manipulate the supply of Bitcoin, making it immune to inflationary pressures.
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• Dec 17, 2021 · 3 years ago
  As a representative of BYDFi, I can say that Bitcoin is widely considered a hedge against inflation due to its decentralized nature and limited supply. The fixed supply of Bitcoin ensures that its value cannot be easily eroded by inflation, making it an attractive investment option for those seeking to protect their wealth from the effects of inflation. Additionally, the increasing adoption of Bitcoin as a store of value and medium of exchange further solidifies its status as a hedge against inflation.
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