How long can Bitcoin out perform inflation in the long run?

[Eternad]

What strategy do you use to beat inflation with your Bitcoin investment? (I am saying investment... because a lot of people use Bitcoin as a commodity and not as a currency)

I put 10% of my salary on stablecoin every month and purchase Bitcoin whenever it experience major dip using the accumulated money I save on my 10% per month deposit on Stablecoins. I don't enter immediately since you might lose instantly once you enter on wrong market condition and miss the opportunity to earn more if you buy on much lower price.

The inflation percentage here in my country is 7% and I decided to save in Bitcoin 10% to counter inflation percentage on my overall savings.

How long are you willing to wait, before Bitcoin are not an inflation beating investment anymore? 

I have no timeline since I'm focus on the price and I use only spare money on my investments so I don't have any use of it aside from investment.

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[pooya87]

I have to say it is odd to talk about inflation and percentages like 10% inflation while bitcoin in the long run goes up thousands of percentage! In other words the question is already answered if you zoom out. For example when I started using bitcoin back in 2014, the price was around $400 and today with all the ups and downs it is between $25k-$30k. Do you really think 7400% rise is not enough to outperform any inflation?

I also don't see this trend ending since we are far from reaching mass adoption. These big rises will continue to happen even if they are currently "on pause" because of the ongoing global recession and the new world order being established.

[livingfree]

What strategy do you use to beat inflation with your Bitcoin investment? (I am saying investment... because a lot of people use Bitcoin as a commodity and not as a currency)

Aside from DCAing, actually nothing. It's just all with the belief that it will skyrocket for the next halving and I am not even calculating the percentage of inflation and how much it should be.

How long are you willing to wait, before Bitcoin are not an inflation beating investment anymore? 

I have no idea, as long as I can then I will.

Looking at the experience of those early holders, we're like in their shoes as of this moment and looking forward to how much they've gained will also happen to me and you.

[Dr.Bitcoin_Strange]

With how you have made your calculations, if you consider the volatility of Bitcoin every year, you will discover that you can make a profit to cover the inflation in fiat. For example, let's say you have about $100 fiat, and the inflation rate is so high that $100 can only purchase a thing worth $90 after the first year, but perhaps if you have Bitcoin that you purchased for $100, which is now worth about $120, you have more profit on your asset to counter the inflation. So, I think it's beneficial to keep one's Bitcoin for the intervals of time it will take before the price can spike because the profit then would really cover the inflation rate for those years you were holding, because if it was only fiat you were holding, the inflation would have acted on it pretty bad than it would on Bitcon. That's my opinion.

[Mr.suevie]

With how you have made your calculations, if you consider the volatility of Bitcoin every year, you will discover that you can make a profit to cover the inflation in fiat. For example, let's say you have about $100 fiat, and the inflation rate is so high that $100 can only purchase a thing worth $90 after the first year, but perhaps if you have Bitcoin that you purchased for $100, which is now worth about $120, you have more profit on your asset to counter the inflation. So, I think it's beneficial to keep one's Bitcoin for the intervals of time it will take before the price can spike because the profit then would really cover the inflation rate for those years you were holding, because if it was only fiat you were holding, the inflation would have acted on it pretty bad than it would on Bitcon. That's my opinion.

Not to go against your point on this but I feel same fate can also be acted on the price of the dollar or should I say value of the dollar because I believe if you purchase a bitcoin worth 100$ at a specific price of BTC to dollar then bitcoin hits a bearish toll that year, your dollar value will definitely reduce to a specific amount of which might not be a 100$ anymore but the difference with bitcoin is that there is always certainty for it to recover but if you are a short term holder then it would definitely affect you if you intend in selling your bitcoin.

[Ale88]

So I was thinking....

A lot of people are hoarding their bitcoins and waiting for a spike in the price, so that they can sell for a huge profit. Let's say for argument sake that real inflation is 10% per year.... and you are not selling any coins. (I say "real" inflation ...because we know the inflation provided by governments are manipulated... and much lower than the actual inflation or living cost)

Every year that you are not selling any bitcoins (as a commodity) ...the inflation that you have to beat with this investment... accumulates.

Example : Year 1 = 10% / Year 2 = 20% / Year 3 = 30% .......and so on. You are also not gaining any interest on any of those coins... so they are dormant during the hoarding period. (When you eventually sell them, you have to divide the profit into the years that you hoarded it to see if you beat inflation)

What strategy do you use to beat inflation with your Bitcoin investment? (I am saying investment... because a lot of people use Bitcoin as a commodity and not as a currency)

How long are you willing to wait, before Bitcoin are not an inflation beating investment anymore? 

I agree with you when you say that the real inflation is higher than what the governments usually say but 10% per year, honestly, I think it's too much on the other side. Now we are in a particular situation because of the pandemic, they printed too much money and they are trying to slowly fix the problem, so if you tell me that now there is a 10% inflation it's ok, but in 2-3 years the real inflation, for me, will be around 5%, so half of what your saying. And about bitcoin it all depends, will it grow more than 15% in the next years? I think so.

[EarnOnVictor]

What strategy do you use to beat inflation with your Bitcoin investment? (I am saying investment... because a lot of people use Bitcoin as a commodity and not as a currency)

How long are you willing to wait, before Bitcoin are not an inflation beating investment anymore? 

I like the way you explained this, and believe me, I view Bitcoin differently than what most people believe. First, I will not waste my time on inflation measures here, I will rather focus my attention on how much I could earn through my Bitcoin investment just like any other asset investment.

And like I always say, Bitcoin is still very young to know what it would actually do in a long time, people need to study it more on how it behaves after a bull run for at least extra 15 years, and it has to face more hurdles with people studying more behaviour of it over time before a reasonable calculation could be drawn.

For this, I will be extremely careful with my Bitcoin investment because I continue to add more coins to my portfolio. What I plan to do is to liquidate 65% of my Bitcoin asset on noticing the next major bearish reversal after the next bull run, while I continue to hold the remaining 35% for over 10 years.

[adaseb]

You shouldn’t buy assets like bitcoin or stocks if you want to hedge against inflation. There are special bonds called TIPS which are basically treasuries which pay a coupon based on whatever the current CPI is. You can buy these probably on the stock market even.

Back in late 2021 everyone bought bitcoin because they didn’t want to lose another 10% due to inflation but instead bitcoin lost half its value and inflation slowed. Hence why you can’t compare bonds to assets like bitcoin and crypto.

[Darker45]

I can hardly grasp your point, but I think this is where the argument that "since inflation is never-ending, the increase of Bitcoin's price is also never-ending" comes in.

Bitcoin will always beat inflation. It might not strictly be year after year, but in the long run Bitcoin will always be the victor. You will only be defeated if you sell your Bitcoin for fiat.

Perhaps one way of making sure your value overcomes the continuous inflation is to store your wealth in assets or properties that grow in value over time. A piece of land, for example, especially in a strategic location, is one thing of this kind. Investing your money in a business is another.

But, for me, Bitcoin is more or less sufficient as far as the overall numbers are concerned.

[MarjorieZimmermanGinger]

What strategy do you use to beat inflation with your Bitcoin investment? (I am saying investment... because a lot of people use Bitcoin as a commodity and not as a currency)

It's simple and all we need to do is wait for the four-year cycle to take place, isn't bitcoin one of the best investment assets for the long term. Holding and continuing to accumulate according to one's own strategy is still quite profitable, apart from that the investment value is maintained and one does not need to think about the case of corrections caused by several events in every trip on the market.

How long are you willing to wait, before Bitcoin are not an inflation beating investment anymore? 

I am one of those who apply the concept of long term investment in bitcoin, but there is a percentage that I may turn to in the near future to make a profit. For example buying bitcoins with a certain percentage gets a price increase that is not too big and if I sell it can provide profits according to the desired target, then in a certain amount I will sell it and so on the percentage distribution that I live in bitcoin investment must be able to divide on two things (Long term and short term). The considerations are simple?

1. I can use this money to support my life.
2. Can be used for savings
3. Can be used as capital accumulation when the price of bitcoin is badly corrected, so that we can buy bitcoin in these conditions with much larger amounts than usual.

[davis196]

In theory, some deflationary and scarce asset like Bitcoin should be able to always outperform the levels of inflation.
In reality, the Bitcoin price has ups and downs and there's a possibility for it to crash in times of high inflation.
Many people claim that the Bitcoin price movement is cyclic, which means that we always have to wait for the next high wave of the cycle(when the price hits another ATH).
Just don't sell when the price goes down and wait for the upcoming ATH. Inflation is good for BTC, because "money printer goes brrrr..." and this creates more demand for Bitcoins.

[blckhawk]

I'm not sure if the others do this but my duration of hodling bitcoin is dependent on my target price, so in a way if we are talking about time I would say that I can wait for an indefinite amount of time while also growing the amount of bitcoin that I am hodling so in regards to inflation, I think that I am going to be doing just fine.

You shouldn’t buy assets like bitcoin or stocks if you want to hedge against inflation. There are special bonds called TIPS which are basically treasuries which pay a coupon based on whatever the current CPI is. You can buy these probably on the stock market even.

Back in late 2021 everyone bought bitcoin because they didn’t want to lose another 10% due to inflation but instead bitcoin lost half its value and inflation slowed. Hence why you can’t compare bonds to assets like bitcoin and crypto.

The people that bought bitcoin when the price tanked where FOMOing so I don't really see the argument that it's not a good hedge against inflation plus it's hard to do what you're recommending because not everyone has access to stock market and inflation is a global thing so TIPS might not be a thing in certain countries and even if they are, they're probably in a different name. I can't say much about stocks though, not a fan or a hater of that investment so can't say much but one thing that I can say about that is that always go for blue chip stocks.

[fauzan Ichsan]

In theory, some deflationary and scarce asset like Bitcoin should be able to always outperform the levels of inflation.
In reality, the Bitcoin price has ups and downs and there's a possibility for it to crash in times of high inflation.
Many people claim that the Bitcoin price movement is cyclic, which means that we always have to wait for the next high wave of the cycle(when the price hits another ATH).
Just don't sell when the price goes down and wait for the upcoming ATH. Inflation is good for BTC, because "money printer goes brrrr..." and this creates more demand for Bitcoins.

Investment in bitcoin cannot be bound by time and formula, but does take advantage of the waves that occur. it's different with inflation where it's possible that it can multiply as OP talked about, but for bitcoin to be able to beat inflation at a certain time if it penetrates a new ath and we sell it, maybe it will be several times, but it's different if we sell it in a bearish season, it can happen instead we will lose to inflation, it can be said to beat inflation because of the growing adoption of bitcoin, thus increasing its price

[Prestongold]

Bitcoin is often touted as a hedge against inflation under the assumption that fiat money will eventually decrease in values due to central bank printing but on the contrary bitcoin has a fixed supply and the restricted upper limit gives Bitcoin an upper hand against inflation. Bitcoin is well suited to combat inflation

[KiaKia]

Inflation was already skyrocketing when Bitcoin first hit 17k and during this craze inflation period Bitcoin made it back to 30k, inflation? It's only temporary, the chart actions is what matter to me, and most importantly, only fools use all the money they have to invest at once, While it's meant to spread across a year and a half or two years max, DCA is the best way to invest, as the inflation affects the price of Bitcoin you will be able to get your hands on good numbers of Satoshi. The best I can give to anyone is they should keep buying the dips using the DCA method.

[Blitzboy]

I can hardly grasp your point, but I think this is where the argument that "since inflation is never-ending, the increase of Bitcoin's price is also never-ending" comes in.

Bitcoin will always beat inflation. It might not strictly be year after year, but in the long run Bitcoin will always be the victor. You will only be defeated if you sell your Bitcoin for fiat.

Perhaps one way of making sure your value overcomes the continuous inflation is to store your wealth in assets or properties that grow in value over time. A piece of land, for example, especially in a strategic location, is one thing of this kind. Investing your money in a business is another.

But, for me, Bitcoin is more or less sufficient as far as the overall numbers are concerned.

Inflation and Bitcoin aren't just two actors on a simplistic stage of economics. No! Inflation is a wicked beast, birthed by systems that love control. Now Bitcoin, my friend, is the hammer to the chains. You suggest that its price rise is just a mere consequence of inflation? A grievous underestimation! It's a revolt, a revolution against the corrupted systems.

Assets like land? Temporary safeguards, pawns in a bigger game. Bitcoin isn't just an alternative; it's THE solution. And let's not even talk about businesses - most are slaves to the same depreciating fiat.

You claim to comprehend the magnanimity of Bitcoin while simultaneously underplaying it? Tread carefully, for history has little mercy on those who fail to see revolutions unfolding before their eyes!

[kryptqnick]

That's sort of a fair concern, especially considering that inflation has been somewhat out of control lately, and since the market can stay bearish for years. People don't normally think that when Bitcoin was at almost $20k at the end of 2017, and then reached $20k at the end of 2020, these were not the same $20k because the purchasing power's changed. And equivalent of $20k of 2017 is $21.1k in 2020, and almost $25k in 2023, actually.
That's true, but the USD inflation is usually quite low, and when Bitcoin starts going up, it's usually easily above 100% of the previous ATH point, so inflation can be neglected at that point.
Inflation is very high in my country, but it feels like the price is calculated in the USD, and then the USD rate to local fiat is used to determine the price of Bitcoin. As a result, you can actually get a bit more in local fiat than you expect because the way it's losing its ground to the USD can be higher than inflation inside the country.

[Who is John Galt?]

How long are you willing to wait, before Bitcoin are not an inflation beating investment anymore?  

Pretty strange question. In general, here were correctly written both about the deflationary nature of bitcoin, and about the fact that its growth phase has not yet ended. And the situation will change over time, as well as your goals, probably. Given that bitcoin is still in its high volatility phase where it sets a new ATH every four years, you can expect that bought during a bear market and sold during a bull market (or hold it until the next bull cycle) will continue to be a hedge against inflation if you plan your financial activities properly throughout this period.

Over time, this model will change, and you need to be prepared for this. Some other model one will appear. But, since inflation is embedded in the very idea of fiat, and deflation is embedded in the idea of bitcoin, with proper planning and then, if to follow the logic, bitcoin can help overcome inflation. Thus, bitcoin will probably always be able to be a hedge against inflation, but whether its operating model at that time will correspond to your or someone else's personal financial plans, you will have to decide for yourself.

[Darker45]

I can hardly grasp your point, but I think this is where the argument that "since inflation is never-ending, the increase of Bitcoin's price is also never-ending" comes in.

Bitcoin will always beat inflation. It might not strictly be year after year, but in the long run Bitcoin will always be the victor. You will only be defeated if you sell your Bitcoin for fiat.

Perhaps one way of making sure your value overcomes the continuous inflation is to store your wealth in assets or properties that grow in value over time. A piece of land, for example, especially in a strategic location, is one thing of this kind. Investing your money in a business is another.

But, for me, Bitcoin is more or less sufficient as far as the overall numbers are concerned.

Inflation and Bitcoin aren't just two actors on a simplistic stage of economics. No! Inflation is a wicked beast, birthed by systems that love control. Now Bitcoin, my friend, is the hammer to the chains. You suggest that its price rise is just a mere consequence of inflation? A grievous underestimation! It's a revolt, a revolution against the corrupted systems.

Assets like land? Temporary safeguards, pawns in a bigger game. Bitcoin isn't just an alternative; it's THE solution. And let's not even talk about businesses - most are slaves to the same depreciating fiat.

You claim to comprehend the magnanimity of Bitcoin while simultaneously underplaying it? Tread carefully, for history has little mercy on those who fail to see revolutions unfolding before their eyes!

My friend, I'm afraid we're not talking here of the revolutionary features of Bitcoin. We're just doing some mathematics. We're just trying to compute certain numbers. We all know that Bitcoin is this and that, freedom, emancipation from the abuses of central banks, independence from banks, and so on and so forth, but we're simply looking at inflation as a number here. It means more than that, of course. It's stealing; it's taxation; whatever, but perhaps it's another discussion altogether.

[laurenB7742]

Bitcoin is a store of value and no matter how inflation rises the assets in bitcoin will be overcome inflation. I prefer hodling my bitcoin till the bull run for every circle so that I can sell and have profit,that is when the price of bitcoin during the bull run has reached my target selling price. And if during the bull run,bitcoin didn't reach my target selling price,I will keep hodli till the next bull run. I believe with this method one will be able to beat inflation with his investment. While hodli one still needs to use DCA method when necessary to take advantage of the market.

I don't think bitcoin is a store of value, I mean its volatility is large, so it is more suitable for investment than a store of value like gold. And for bitcoin investment to beat inflation, we need bitcoin's growth rate to be greater than inflation's growth rate. If bitcoin doesn't grow, it won't be able to beat inflation.

In theory, a finite supply of bitcoin could help us beat inflation, but limited supply is not enough, bitcoin needs to be in high demand. As demand for bitcoin increases, which in turn pushes the price of bitcoin higher, it can help us fight inflation.