Bitcoin Forum

Bitcoin as a deflationary currency has sustained its position as the only exit from inflation as Bitcoin continues to move above every form of resistance from the Central currency which is an inflationary tool in the hands of the government and the central banks.
Bitcoin made a 9.3% price increases against the United States dollars on the first day of October a move that happens on a day the US Department of Commerce announced the 0.3% increase in August and 3.6% over a year.

The other possibly more important reason why bitcoin can act as a hedge against inflation and the possible failing economy is that bitcoin is not linked to the traditional assets even though it may be affected by the economy as a whole in short term.

The short term increases (or decreases) don't matter. The long term is the important one.
For example over the past 2 years from 2020, price has gone up 1400% or
in a longer period over the past 5 years from 2016 price has gone up 11000%

Bitcoin was never subject to resistance from the central currency as they are both uncorrelated and respond to different factors. As you said, fiat is a tool for the government and banks, Bitcoin is an asset which is free for all to use and controlled by none.
This decentralization makes Bitcoin immune to poor fiscal policies which fiat currencies are exposed to and makes it less susceptible to inflation. Corrupt and underdeveloped countries usually suffer from inflation a lot and their currencies are highly unstable, for those people bitcoin is an ideal hedge against inflation.

I would qualify that and say that Bitcoin is by far the best asset to beat inflation. Assets that were used to beat inflation traditionally do not have a limit to their production. Bitcoin does. That makes Bitcoin by far the most profitable asset since its birth, not simply by beating inflation by 2-15%, as traditional assets did.


I agree. It's what's called an uncorrelated asset. But over time it will become less uncorrelated if large institutions continue to buy in.

The United States does not need this advice as there are already aware of the implication of using Bitcoin and its advantage, it is the citizens that are left with the choice even china can not ban Bitcoin but can ban it, citizens, from using Bitcoin and this is two different things.

Bitcoin can only be a hedge against inflation ..if it beats inflation year on year.... but something that can help with that is this... if the inflation is say 5% and you manage to buy low and you sell at a much higher price, like I did in 2017 when I made a 800% profit on my initial investment... then you divide that 800% by 6% and you will get 133 years .. that this investment kicked inflation ass... if inflation stay at more or less 5%.  ;)

Let's divide 800% by 10% = 80 years that you will get double your money back on your initial investment. (You also get interest on that money ...if you re-invest it... or simply put it in a Bank)

This is the extreme scenario and not everyone can get a big profit like I did.... but it shows you how you can beat inflation, if you are lucky.  ;)

Hence why some huge companies are already purchasing bitcoin in huge numbers. If the data and statistics don't speak for themselves, these companies would probably just ignore bitcoin up to now and stick with their assets and fiat, however that's not the case.

During the first year of the pandemic, bitcoin outperformed lots of traditional assets in terms of valuation. While the rest of the world's economy is scrambling to patch itself up and prevent itself from collapsing, bitcoin just didn't care and zoomed to its new ATH. Of course, a lot of hype and FOMO kicked in during those times, but to know that a lot of people were willing to buy bitcoin in the midst of a pandemic says something about the asset itself.

This is the biggest landmark for Bitcoin, being deflationary which is also connection with it being a good store of value. While we are all rooting for Bitcoin to become primarily a currency to be used for everyday transactions, we can not forced its implementation and this is also because people are holding on to their Bitcoin...why would I be using it to buy a coffee when I know for a fact that soon it will increase it value? Soon, Bitcoin will really be recognized for this job alone, that of protecting us from inflation which is getting to be unescapable these days along with taxes and death.

Bitcoin can not be created, mined more than 21 M. With the increasing demand, the limited supply means deflationary.

Fiats can be printed as much as governments want. Stable coins can be minted as much as stable coin companies want. With Bitcoin, nobody, no institute, no government can create more than 21M and 18.8M of Bitcoin was mined

https://coinmarketcap.com/currencies/bitcoin/

I keep wondering when people ask questions like this, as if what you, me, and some others know is some secret knowledge that is not available to an ordinary person who just needs to turn on a computer, go online and use a search engine. In general, most beginners who come to this forum show that they do not have the ability to see the bigger picture, and that is why they are constantly in a kind of panic every time the price drops by 5% or more.

I believe that some who read your post sincerely doubt the accuracy of your data because it seems unreal to them - and it is even more unrealistic to believe that Bitcoin has really shown so far that it is a very good (not to say excellent) hedge against inflation. Far from advising anyone to invest in something, but Bitcoin has really protected me from inflation in the past 5+ years in a way I could never have imagined.

After reading your comment I have to do some little google search before commenting here, you are right the data is not correct I hope to see it edited and updated with the right data. That being said bitcoin is not in the same category as faint currency as the total supply of bitcoin can not be exceeded but the faint currency can be printed at will by the central bank.

Bitcoin is unique in the amount it has increased but it is not uncommon to see stock markets get a 100-1000% increase in value. The difference was Bitcoin was holding its price and then continuing to increase which meant we arrived at over 50k price. Stocks usually dip and dive more than Bitcoin and do not see a high percentage over a 5 year time instead they go up by 100% but then negative news sends them back down to 10% increase.

Do you think Bitcoin will continue to see big percent of increase in value in the next 2-5 years or do you expect Bitcoin inflation to reduce quickly now that we have seen huge gains in the last 5 years?

I don't know what you searched and where you looked but the numbers I posted are correct. I rounded some numbers for convenience and used the average instead of highest/lowest but that doesn't make any difference in what I was saying about the long term rise. Lets take a look.

Here is what you should have looked which is the chart showing the price change over the years: https://bitcoinwisdom.io/markets/bitstamp/btcusd
Past 2 years (from 2019):
Lowest price: $3,322
Highest price: $64,895
Increase percentage: 1,853.49%

Past 5 years (from 2016):
Lowest price: $310
Highest price: $64,895
Increase percentage: 20,833.87%

Past 10 years (from 2011):
Lowest price: $2.1
Highest price: $64,895
Increase percentage: 3,090,138.09% (that's 3 million percent!)

Bitcoin doesn't have inflation, but yes I believe we will continue seeing big rises for the foreseeable future until we reach mass adoption which is not going to happen at least for another 10 years.

I did not write that the data are not accurate, but that some people (like you) will doubt them, which turned out to be correct. In some conversations with friends and acquaintances I just presented this kind of information and people looked at me in amazement as if I were telling some lies or nonsense. It’s hard to accept that something can have such huge growth in a relatively short amount of time, and even if for someone 10 years is a very long period, 5 years is certainly not a period that should be a problem for anyone.

Even countries are now adopting Bitcoin and are investing their liquidating country reserve and budget into buying Bitcoin because they are now aware of the possibility of Bitcoin being the escape route to inflation. As the inflation ratios of many countries are on the rise, deflationary currency like Bitcoin becomes the only choice.

I think that Bitcoin is, at the moment, possibly the greatest investment and store of value. Think about it: Everyone seems to be entering within the next years, some have already switched to it, it has better characteristics than gold, which means a matter of time. Not to mention its annual yield (https://bitcointalk.org/index.php?topic=5351947.msg57578334#msg57578334).

It's surely the hedge against inflation and who knows what's waiting for us and the GDP within this decade. Buy Bitcoin, hold it and enjoy the safe haven.

Inflation of Bitcoin reduces steadily every 210,000 blocks. We don't expect it to reduce quickly or slowly. We don't even expect anything; we know the inflation rate Bitcoin has and will have for the rest of its existence.

The only thing that can connect bitcoin to traditional markets are interest rates, which make keeping cash is useless with inflation rates and therefore they may invest in alternatives, bitcoin may be one of the options with a pack of gold, silver , Real estate, stocks and others.

anyway, changing by 5% is normal in bitcoin daily price movement.

I think that bitcoin is great way to protect against inflation, because as we are seeing with the constant problems that are going on in the world the drawback of covid the governments are constantly trying the fix a problem with a solution that will heavily affect the economy on the long run, and because of how bitcoin and crypto market somewhat is independent from all of this and is backed by its own values and and people that are believing in it and being moved independently from all the assets.

Looking like a damn good hedge against inflation in 2021 & we still have Q4 of the bull run to come. Today has been a great day for bitcoin, up 10% with more to come I think before New Year.

 

The more Bitcoin grows, the more resilient it is to all weather inflation. the fact that apart from being a fence can also make everyone unable to say that this is a lie. Bitcoin has definitely achieved things that no one could have predicted. So that the number of companies that have looked at Bitcoin certainly makes them believe that all this time Bitcoin can save them when the economy is destroyed because too much money is printed.

There are some of them who are still unaware and selfish when they are hit by a pandemic. Stick with fiat and all its properties. But if you see them now, they are only spectators (not connoisseurs).

And when Facebook has shutdown temporarily, bitcoin's price soar while Facebook's stocks stonks. The best of bitcoin is yet to come and that's why if you can hold at these times, you can also hold during the bearish times which is going to make it easier.

Many countries have been adopting it even there's no mainstream media before. Now that the price and value soar, they're getting an eye on it.

Now probably they all see how bitcoin can prevent inflation from traditional asset although it's very worst when there's a manipulation in crypto market, but the potential to recover back or to increase more is the one that can make it more interesting.. Just imagine what happen when covid19 spread in the whole globe, we saw that most of the traditional assets decrease growth rate wherein only china survive even though the virus was made within the country.. Lol  and that's how crypto currency explode and realy getting more attention because the price skyrocketed while real fiats decrease more. Now they keep monitoring the crypto market, so what we're expecting? They will gonna ride crypto?  :D its possible in my personal opinion wherein soon in the future.

The explosion of covid 19 could be more of a blessing in disguise for bitcoin and the crypto market because their demand have been increase which is totally different from fiat because it starts to depreciate its value. And if this pandemic will last long, then the demand for bitcoin will get even higher, thus seeing fiat more depreciating. This proves that bitcoin has always a hedge against inflation because bitcoin itself is more on deflationary. And as expected, bitcoin is getting more value in this crazy times while sad to say, most of the fiat investments are having difficult times and might not even recover in the days to come.

Overall that said, it's not really clear whether Bitcoin is, in fact, a deflationary asset. Or at least, not yet a deflationary asset. The reason why some types of cryptocurrencies can act as a hedge against inflation is for the same reason as gold: supply is limited. While it is technically true that the supply of these cryptocurrencies is limited, we are not close to that limit. It is encouraging that today investors not only see crypto as a stable hedge against US dollar inflation, but if they only see crypto as a substitute for gold, then they are missing the point: cryptocurrencies are more than just a hedge against inflation.

and it could be good news if in the future the government will see more of how to use bitcoin and crypto as an alternative means of payment in their country. because fiat will become more and more obsolete, and bitcoin and crypto will be the future.

"Bitcoin as a deflationary currency has sustained its position as the only exit from inflation"  this is simply a false statement. Bitcoin is not the only "excit from inflation" traditional investments/assets can and are currently also keeping up with inflation..that's anything from stocks to some baseball cards.

Stock market as a whole has been having a lot of problems lately and there has been many dumps, including the latest one. Incidents such as Facebook case are only accelerating that dump. For example over the past months S&P has lost 300 units, NASDAQ 1500 units, etc.
Meanwhile over the past months bitcoin has gone up $26400 and is still rising...

Bitcoin is not "the only exit form inflation". Real estate can also serve as a hedge against inflation.
I wonder why all the "Bitcoin is the ultimate protection against inflation" type of forum threads appear every time there's a bull run on the Bitcoin market.When the Bitcoin price drops,all these forum posts praising Bitcoin suddenly disappear. ;D
The BTC/USD currency pair doesn't matter,what matters is the fact that Bitcoin price will go up in the long term,despite the all price volatility and bear markets.Bitcoin is a scarce asset and the supply of BTC cannot be controlled by any human or entity.

Hopefully, it could attract more governments to see the advantage of bitcoin and crypto to them as some countries already use bitcoin. If they do not use bitcoin as a payment, that will not be a problem but they should allow people to use bitcoin because bitcoin can give hope to them. If the pandemic is ended, we will see people get the opportunity to make money from bitcoin. But they need to be careful with the price volatility of bitcoin as until now, the bitcoin price is moving fast.

This is why bitcoin is the best asset that we can own. We're not belittling the power of stocks but people who are eager with stocks should also look for bitcoin in a good chance of beating against inflation.
If they're the type of investor that likes to diversify then they should really look at bitcoin and have a portion of their portfolio on it. It's proven a lot and its growth are more than the percentage of the known blue chip stocks.

Bitcoin is the only asset which is a perfect hedge against inflation. The main reason for this is that its supply is limited and more importantly, there are always some bitcoins which are lost and this will continue. For example if someone who owns bitcoin and dies or anyone lost the private keys etc, all these things make the supply even more limited.

Bitcoin is unquestionably going within the positive trajectory, with the price getting higher and higher from the long-term perspective. However, we've also seen that sometimes it takes years to recover, and that's something many people and perhaps also businesses cannot afford. Inflation is also argued to be a good thing because it motivates you to spend money rather than hodl it, but that's only relevant to the discussion about Bitcoin being a kind of money, not a long-term investment or a store of value. It seems to be one of the greatest options in the world when it comes to long-term investments, but it's also worth noting that this is only the case if you believe that Bitcoin will keep growing. There's no guarantee it won't crush one day and never crawl back, so this is also something that probably stops a lot of people.

I don’t belong to the class of thought that bitcoin will one day crashed it’s not a bubble and it will remain relevant only the price can change. If you have studied the price closely, you discover Bitcoin has consistently grown in price as time goes on and development keeps happening.

On the other side of investments, many will argue about telling that bitcoin is perfect. And the lost bitcoins aren't not just some but the estimation is that it's more than a million of bitcoin.
So if we have a limited supply of bitcoin to 21 million then that's around 20 million or lesser than that that will be mined and we're currently at 18+ million bitcoins that has been mined already.

Bitcoin is on its way to becoming the solution to the world economic crisis and in the end, bitcoin will truly eradicate inflation since it is a limited supply currency, unlike its counterpart faint currency which does not have a total supply that new notes a printed at will by the Central bank to support the already crashing economy.

You are going too far in my opinion. Bitcoin is never going to solve the inflation problem just because bitcoin itself is deflationary. The inflation will continue to exist simply because the foundation of the economy is set in a terrible way that demands that inflation. If anything bitcoin is a solution to economic corruption not the crisis.
Not to mention that bitcoin is offering the exit from that corrupt system while not changing anything in the world. People have to choose to take that exit.

Development and progress keep on happening in BTC throughout the decade while for its counterpart that is being printed and will result to a slowly increase in inflation. BTC proves to be a good escape if you are going to invest in an asset with an assurance of growth to it.

No it will not happen :).

Bitcoin will eradicate inflation?? That will not happen. Not all people in the world are using Bitcoin and in fact less than 10% of the global population are using it (maybe it is, just a random number that came to my mind but I'm pretty sure). You can say that Bitcoin can be a hedge against inflation but it isn't enough to say that it will eradicate it.

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I think the mere fact that Bitcoin has a limited supply and its decentralization is a proof that it can be a hedge. Just seeing on its movement itself and you can see that those who held Bitcoin for a few years have more money than those who are just holding their money and storing on a bank. Many are saying that Bitcoin is the hedge against inflation so what are you waiting for? :P Accumulate now :D.

Theoretically, bitcoin is positioned as a hedge against inflation based on real value, investment interest as well as deflationary and controlled money supply, used as a potential primary medium of exchange in a digitally driven world economy. Bitcoin is also technologically structured to encourage deflation and to remain as a relatively stable store of value, similar to the standards that apply to another asset class, gold. From there, we can see bitcoin and cryptocurrencies act as a real and meaningful hedge against inflation – provided, of course, the positive economic policies that promote it.
During the COVID-19 pandemic, bitcoin is becoming one of the smarter investment choices ever, and it's also important to have an effective inflation hedge like bitcoin. Economists say bitcoin can act as a hedge against inflation in the 21st century

At the same time it's not really connected to one country's economy. Therefore there is a value of stability here, it can also be really helpful for countries which are in a civil unrest as well.

-This way they work as a strong tool to control the drastic situations in various countries and sectors as well since they are not entangled into just one and if you see it like that, these countries generally supports each other indirectly. The strong economies for sure makes big investments here and which can help break the wealth barrier in other parts.

Taking about Inflation. I do think that, we don't really have much to worry about since the whole ecosystem of cryptocurrencies like bitcoins is very different from the ecosystem of fiat and other assets, they basically have different rules definately compared to normal economy.