Bitcoin can fight inflation?

[franky1]

nothing can fight inflation because bitcoin isnt some politician in the treasury that can change the treasury policy..
in short inflation will happen.

but bitcoin can offer citizens an option to escape inflation.
(emphasis bitcoin on the bitcoin network. but not the tokens/units of pegged bitcoin on altnets/sidechains)

so just stay well clear of the sidechains/altnets and such that are pegging bitcoin. they are not the "value store" of deflationary bitcoin. they are just the temporary tools for features like faster payments. dont EVER think of altnets/sidechain/subchains as the place to lock up and store coins in long term. as they can de-peg/inflate from the btc amount very very easily, without notice. .. as easy as a software update on the altnet

frational reserve(inflation tool) is not possible on the bitcoin network. bitcoin is deflationary. but the sidechains and altnets pegged to bitcoin can change the pegs to fractional reserve their units/tokens, whereby the altnet/sidechain represented pegged coin is then inflationary.

in short you cant move bitcoin off the bitcoin network. it never moves off. so all these other token units on other altnets pretending to be bitcoin are not bitcoin.. they are other tokens which can easily break their limit/value/peg

[1715460596]

1715460596

[Stalker22]

Bitcoin is a type of digital currency, whose value is not regulated by any central bank or any government. It also has limited supply, with only around 19 million bitcoins currently in existence. Thus, with such limited supply, it has to be priced, to some degree, differently than traditional currencies.

This means that a bitcoin's price will fluctuate with time, depending on how well it remains in demand. More demand equals higher bitcoin's price. It can, therefore, also fight inflation, because if the demand increases as inflation increases, the price will also increase in proportion. It is important to note, however, that it doesn't have to become the predominant currency to fight inflation.

[darkv0rt3x]

The article in your post is garbage(no offense to you ofc). It tries to convince us that Bitcoin is a good investment to mitigate inflation, but it doesn't talk about its volatility even once.

Why isn't it a good investment?? It's probably the best investment right now if you can wait to be able to see the true value of it! Right now maybe it's not perfect to mitigate inflation just because you can't use it widely in a daily basis for the most common purchases, etc but in due time it will be. Otherwise, yes, it could help with the inflation problem if we had a parallel economy based on Bitcoin.

It's trying to say that Bitcoin is a good investment because it's immune to inflation, but in the same breath, it admits that Bitcoin's prices swing up and down based on people's opinions  .
So if you're thinking about investing in it to save yourself from "inflation", you'd better be prepared to ride the roller coaster lol

Volatility has nothing to do with inflation. Inflation isn't even the increase of prices. Increase of prices is a consequence of inflation. Inflation is a direct cause of money printing and/or the ration of new coins compared to the ones that are already incirculation.
In Bitcoin, the printing is every 10 minutes but the printed coins go down and down every halving event, so, there is no uncontrolled and unlimited printing, meaning that the percentage of new coins is mostly neglectable and will be even more over time until the 21 millions are all in circulation.

If he believes in Bitcoin, there won't be roller costers. He just DCAs in bear markets. Store it and hold. Wait for the adoption and then he may live better!

[suzanne5223]

The rising inflation is becoming a big problem and macroeconomic conditions are worsening.
I want to know if bitcoin can in help us to fight inflation
I came across this article, which says that the decentralised nature of bitcoin and the limited supply of bitcoin can actually help it to retain its value over longer time and thus it can actually help us mitigate inflation .

Can someone help me to understand this further

Link to the article:
https://guardian.ng/features/how-bitcoin-can-mitigate-inflation/

Bitcoin should not and can not fight inflation. It's not the solution for underlying economic issues and is connected to the economic fluctuations such as inflation (as in it will feel it's negative effects).

I think you misunderstand what OP is trying to point out because if we judge by the concept used to create Bitcoin. Yes, it can fight economic inflation which is simply the act of decline in the value of money and for the record, this is the reason why Satoshi created Bitcoin. Besides, this is the major reason why we see institutions that once said negative things about Bitcoin now among those that invest in it.
Although, Bitcoin is not the answer to everything.

And BTC is still in it's infancy, it's not ready nor it can solve all of the economic issues.

Yes, Bitcoin is still in its infant stage since its client version still starts with zero but it gives individuals liberation from economic issues if not some organizations with the inclusion of institution wont have take back the bad thing they once said about Bitcoin.

[DeathAngel]

Bitcoin will fight inflation to an extent. If you buy bitcoin now & check the price in 20 years your likely profit will be far bigger than the inflation that will take place over that time. Because of COVID & the war in Ukraine the world economy is on its ass, inflation is around 10% but that won’t continue. Once everything settles annual inflation will revert to normal like 4% per annum, maybe 3%.

Money in bitcoin long term will beat inflation.

[FanEagle]

Well technically it can, how do I know this? Well simple really, if there is an inflation that literally means that the fiat is not worth as much as it used to. Something that you could buy for 10 bucks today, you will need to spend 12 bucks the other day, that is the definition of inflation. At the end of the day there is a good chance that we could see the exact same thing going on with bitcoin in that case as well.

So, if it is 20k today, due to inflation it would be 22k tomorrow. That type of stuff is the main reason why I believe bitcoin can fight inflation and help us. Of course, it is much more volatile than product prices, so while your milk could go from 4 bucks a gallon to 5 bucks, bitcoin goes from 20k to 60k.

[edgycorner]

The article in your post is garbage(no offense to you ofc). It tries to convince us that Bitcoin is a good investment to mitigate inflation, but it doesn't talk about its volatility even once.

Why isn't it a good investment?? It's probably the best investment right now if you can wait to be able to see the true value of it! Right now maybe it's not perfect to mitigate inflation just because you can't use it widely in a daily basis for the most common purchases, etc but in due time it will be. Otherwise, yes, it could help with the inflation problem if we had a parallel economy based on Bitcoin.

It can be a good investment, but there's an equal chance of your investment becoming bad, real quick. There's one thing for definite tho, when there's a stress on the global economy then Bitcoin crumbles too.

Check this pic: https://i.imgur.com/gpw2p5C.png
We have big institutions(mostly hedge funds) in crypto now, and bitcoin has become just another risk on asset.

It can be a good investment, iff bull market follows your purchase(or an overall booming ecnonomy). But during the time of recession, when inflation is high, it's anything but a good investment.

[KennyR]

Bitcoin fighting against the rising inflation around the globe is a tough task. Bitcoin won't be able to do this, and the market of bitcoin have started to coexist with the traditional market. As for me, bitcoin fighting against inflation is a long term process. Also, this has got the ability to make changes in individuals life in terms of fighting against inflation.

For example during the pandemic a food chain network was able to run successfully just because he kept hold of bitcoin. Even today more ways are available, but this isn't gonna give immediate results.

[348Judah]

The rising inflation is becoming a big problem and macroeconomic conditions are worsening.
I want to know if bitcoin can in help us to fight inflation

One of the benefits in dealing with bitcoin is in its ability to work against inflation and one of the means in which this happen is by having an investment in bitcoin, this is a digital currency that has a great potential to rise and give room for realizing profits, any currency that can appreciate with time and be use as a good source for a store of value and asset is a good example of the coin that fight inflation and its impading influence, bitcoin is a good and best available option of an investment that work against inflation.

[Lucius]

Bitcoin will fight inflation to an extent. If you buy bitcoin now & check the price in 20 years your likely profit will be far bigger than the inflation that will take place over that time. Because of COVID & the war in Ukraine the world economy is on its ass, inflation is around 10% but that won’t continue. Once everything settles annual inflation will revert to normal like 4% per annum, maybe 3%.

Money in bitcoin long term will beat inflation.

So how many people will find that they are willing to wait 20 years to profit from their investment? Even if it is 10 years it is still a small percentage of people who are willing to make long-term investments. If you tell a man today to invest the amount of x in Bitcoin, and that in 2-3 years he will make a potential profit of at least x5, will he listen to you? The fact is that most still do not buy during the bear market, and will only buy when the price goes up.

Inflation is around 10% in some countries, but close to 20% in others, while some countries such as Turkey and Argentina exceed 60% or even 70%. The question is how long it will take for the situation to return to normal, but it will certainly not be quick - it will probably take at least a few years and will depend on whether we have a virus outbreak again in a few months (the EU already has a big jump in some countries) and whether the war in Eastern Europe will continue for another 3 months or 3 years.

[ChrisPop]

So how many people will find that they are willing to wait 20 years to profit from their investment? Even if it is 10 years it is still a small percentage of people who are willing to make long-term investments. If you tell a man today to invest the amount of x in Bitcoin, and that in 2-3 years he will make a potential profit of at least x5, will he listen to you? The fact is that most still do not buy during the bear market, and will only buy when the price goes up.

Inflation is around 10% in some countries, but close to 20% in others, while some countries such as Turkey and Argentina exceed 60% or even 70%. The question is how long it will take for the situation to return to normal, but it will certainly not be quick - it will probably take at least a few years and will depend on whether we have a virus outbreak again in a few months (the EU already has a big jump in some countries) and whether the war in Eastern Europe will continue for another 3 months or 3 years.

Let's look at the facts. I have pulled the historical annual returns of Bitcoin since 2011 and the inflation rate of the US dollar.



I don't think there is anything to add. There is no doubt that the returns Bitcoin offers on the medium to long term are way above inflation. Even if the dollar collapses and we have an inflation of 50%, The BTC returns still massively outweigh the inflation historically. Just keep in mind that past results are not indicative of future results.

[m2017]

Bitcoin will fight inflation to an extent. If you buy bitcoin now & check the price in 20 years your likely profit will be far bigger than the inflation that will take place over that time. Because of COVID & the war in Ukraine the world economy is on its ass, inflation is around 10% but that won’t continue. Once everything settles annual inflation will revert to normal like 4% per annum, maybe 3%.

Money in bitcoin long term will beat inflation.

So how many people will find that they are willing to wait 20 years to profit from their investment? Even if it is 10 years it is still a small percentage of people who are willing to make long-term investments. If you tell a man today to invest the amount of x in Bitcoin, and that in 2-3 years he will make a potential profit of at least x5, will he listen to you? The fact is that most still do not buy during the bear market, and will only buy when the price goes up.

You raise interesting questions in this thread and rightly point out that most people are not willing to wait a few years to make a profit. Everyone wants mountains of gold right here and right now, and the thirst for profit wakes up only in a bull market.

Inflation is around 10% in some countries, but close to 20% in others, while some countries such as Turkey and Argentina exceed 60% or even 70%. The question is how long it will take for the situation to return to normal, but it will certainly not be quick - it will probably take at least a few years and will depend on whether we have a virus outbreak again in a few months (the EU already has a big jump in some countries) and whether the war in Eastern Europe will continue for another 3 months or 3 years.

The question of inflation is painful and to answer it, you need to consider a specific country of residence + related conditions, such as local conflicts or pandemics. As you again accurately noted, the inflation rate is different everywhere. In some countries, investing in bitcoin will be better at offsetting inflation, in others it will be worse. But in general, it seems to me that in the long run, bitcoin still allows you to outperform inflation and allows you to save your funds better than some other financial instruments.

[virasisog]

Bitcoin will fight inflation to an extent. If you buy bitcoin now & check the price in 20 years your likely profit will be far bigger than the inflation that will take place over that time. Because of COVID & the war in Ukraine the world economy is on its ass, inflation is around 10% but that won’t continue. Once everything settles annual inflation will revert to normal like 4% per annum, maybe 3%.

Money in bitcoin long term will beat inflation.

The inflation is out of cryptocurrencies' control and it can't stop its continuous rise. There are lots of factors that affect the current inflation rate and Bitcoin as a currency can't solve the problem but it will help us ordinary people who invest in it survive the inflation crisis through the profit that we could get on it and the opportunities that the crypto world offers. This inflation is a global economic crisis and since there are still lots of people that don't use or invest in Bitcoin, BTC could no way solve this inflation issue.

[JohnBitCo]

The rising inflation is becoming a big problem and macroeconomic conditions are worsening.
I want to know if bitcoin can in help us to fight inflation
I came across this article, which says that the decentralised nature of bitcoin and the limited supply of bitcoin can actually help it to retain its value over longer time and thus it can actually help us mitigate inflation .

Can someone help me to understand this further

Yes, bitcoin is a hedge against inflation as it is limited in supply and can be a perfect alternative to the fiat currency.
 
However, the current economic pressure and increase in global inflation haven't been a deciding factor for people to invest in bitcoin. People are yet to recognize bitcoin's potential. Soon people will recognize the importance of bitcoin when they see their paper money constantly losing its value.

[Smack That Ace]

Bitcoin has a limited supply and is seen as an anti-inflation tool, but maybe that will only be true if we buy and hold it for the next 5 or 10 years, over time fiat will depreciate because the government will continuously printing money and bitcoin is only 21 million dong, bitcoin will increase in price.

Currently, bitcoin is considered as a highly volatile asset class so it is unlikely to become an inflation hedge for the time being, so don't get too excited and overvalued bitcoin in this situation.

[dansus021]

Bitcoin has a limited supply and is seen as an anti-inflation tool, but maybe that will only be true if we buy and hold it for the next 5 or 10 years, over time fiat will depreciate because the government will continuously printing money and bitcoin is only 21 million dong, bitcoin will increase in price.

Currently, bitcoin is considered as a highly volatile asset class so it is unlikely to become an inflation hedge for the time being, so don't get too excited and overvalued bitcoin in this situation.

this is what I am gonna to say.

government is same like eth did and other coin with unlimited supply but the main difference is the gov don't have a burning mechanism that transparent too see and we don't know how much really are the money in circulation. the bitcoin show in the past that can fight again inflation like gold did but the high volatile is become our largest enemy right know

[Lucius]

Let's look at the facts. I have pulled the historical annual returns of Bitcoin since 2011 and the inflation rate of the US dollar.

The facts speak for themselves, and those who have been on this forum since the time when 1 BTC was worth only a few hundred $ know how smart it was to invest in the same, money or your time, in the end, didn’t even matter from today’s perspective. Bitcoin has proven to be an excellent investment in the long run, so although past results do not guarantee future results, I am of the opinion that Bitcoin is still a good investment, although it is not realistic to expect it to be worth 50 times more in 5 years than today.

But in general, it seems to me that in the long run, bitcoin still allows you to outperform inflation and allows you to save your funds better than some other financial instruments.

I agree, although I would always stress that we should be careful not to put all our eggs in the same basket - because although Bitcoin has great potential, it still depends on the availability of the Internet, and even more on how the world's most influential governments treat it. Any ban on trading through CEX globally or even treating possession as a criminal offense would have a detrimental effect on the price.

[Thara20]

No bitcoin cannot fight inflation as the hype surrounding bitcoin is fluctuating. As crypto itself is a volatile market , bitcoin cannot sustain people out of a global crisis. Bitcoin cannot help fight inflation but can help those people who own it , take a softer blow. As many factors come into play when it comes to inflation like regions , price of gold and silver etc. Inflation is connected to global events and things like fuel , food can increase but bitcoin isn’t adopted at mass levels. So it technically cannot be a solution for inflation.

[aoluain]

The article in your post is garbage(no offense to you ofc). It tries to convince us that Bitcoin is a good investment to mitigate inflation, but it doesn't talk about its volatility even once.

It's trying to say that Bitcoin is a good investment because it's immune to inflation, but in the same breath, it admits that Bitcoin's prices swing up and down based on people's opinions  .
So if you're thinking about investing in it to save yourself from "inflation", you'd better be prepared to ride the roller coaster lol

The simple fact that FIAT is devaluing, our FIAT is no longer able to buy the same goods
it was able to 12+ months ago should be enough for people to look elsewhere and protecting
their savings/wealth.

Michael Saylor started talking about this about 18months ago referring to the "block of ice"
melting in front of your eyes.

If you can look past Bitcoins market movements and consider it long term, its the best
safe haven for wealth/savings preservation.

Unfortunately too many focus on what Bitcoin is doing NOW.

[ChrisPop]

The facts speak for themselves, and those who have been on this forum since the time when 1 BTC was worth only a few hundred $ know how smart it was to invest in the same, money or your time, in the end, didn’t even matter from today’s perspective. Bitcoin has proven to be an excellent investment in the long run, so although past results do not guarantee future results, I am of the opinion that Bitcoin is still a good investment, although it is not realistic to expect it to be worth 50 times more in 5 years than today.

Yes, this is something similar to the law of diminishing returns. I like to refer to Bitcoin's market cap in comparison to other assets in order to assess the potential in the medium to long-term. I like comparing with Gold's market cap as it is the most similar asset in terms of its use, but yet so different in its properties.

Gold = $11.5 trillion dollars
Bitcoin = $405 billion dollars

Doing the math Bitcoin could still multiply 28 times from current price just to match Gold's market cap. Not bad at all if you ask me.
$20k x 28 = $560,000

As you said Lucius, 50 times is a little bit out of the range, but anything can happened with this inflation.