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by grey-area 1619 days ago
It’s really not. It is highly correlated with high risk assets and growth shares. It is anything but an inflation hedge, which is why it has been plunging as inflation rises and will fall more if interest rates rise.

If it were an actual currency things might be different, but instead it’s just another high risk speculative asset.
1 comments
ashwagary 1619 days ago
Just because BTC is temporarily correlated with risk assets, that doesnt mean it wont change.

Also, it's better to look at charts by starting at the beginnning of this 4 year cycle, dont pick out a bearish 6 month period and falsely claim BTC fails the inflation test. Short termism and Bitcoin's monetary policy are incompatible.

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zepto 1619 days ago
It certainly fails the inflation test without any doubt today.

You seem to be saying that it might pass it in the future.

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ashwagary 1619 days ago
Wrong, real inflation has been rising at an alarming rate for more than a decade, it didnt start in Q4 of 2021.

If you choose to measure BTCs performance poorly (3-6 month windows), you are just feeding yourself a false conclusion since Bitcoin had a 5,000,000x return over the past decade.

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zepto 1619 days ago
You’ll need evidence for that, and a way to disambiguate Bitcoin’s performance as an inflation hedge from the speculative bubble.

> it did a 5,000,000x plus return in that time

Then it is self evidently not an inflation hedge.

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ashwagary 1619 days ago
BTC's monetary policy makes it an inflation hedge regardless of what humans are doing with it, the cycles just take 4 years to play out. The evidence is literally in the code.

No need to complicate things, just focus on 2 key questions...

1. Is the BTC supply inflation rate lower than the US dollar’s (and other fiat currencies)?

2. Will it be lower for the forseeable future?

That will give you the simple answer you are looking for...both answers are 'yes' btw.

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zepto 1619 days ago
Price and supply are independent. Bitcoin isn’t a currency. It’s a speculative asset. It doesn’t matter whether it is inflationary within its own realm, so these factors tell us nothing at all.

What matters is whether the speculative asset acts like an inflation hedge.

Spoiler: it does not. It acts like a speculative bubble.

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grey-area 1614 days ago
Here’s another question to focus on:

If it is mostly used to speculate, not transact, does the supply matter at all to the price?

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