Bitcoin is a hedge against inflation in 2025?

[suzanne5223]

Despite Bitcoin's glaring potential and performance over the years, proving it to be a hedge against inflation, some people will still never seek refuge in Bitcoin.
Meanwhile, this is due to their naive understanding and unwillingness to learn new things. I read a celebrity comment days ago that most celebrities are not Bitcoiners because most of them never plan to learn new things after graduating from university or receiving PHD due to their belief in having adequate knowledge.

The second reason is misinformation, and posts that would cause FUD when newbies read posts by some crypto platform, which the news platform you quoted is an example.
I hope we can all play our roles in letting the newbies have access to the right information about Bitcoin and the entire crypto market at large.

[d5000]

I agree with @coolcoinz that the article exaggerates the centralization risk. Mining pools are not miners, and in the case of an 51% attack attempt many miners would rapidly drop out of the attack pool as a successful attack would put their rewards in danger.

And about volatility, it would have been correct from the writer to investigate a bit more. That's what they wrote:

Bitcoin can serve as a hedge — but it’s a high-risk, high-volatility option. It behaves more like a speculative tech stock than a traditional inflation shield like gold or TIPS.

First, only a few speculative tech stocks have achieved a mid/long term growth like Bitcoin's, mainly the big ones like Google, Meta, Amazon which can hardly be described as "speculative" today.

Second, volatility is decreasing steadily:


Source: Bitbo Volatility Index

30 day volatility is currently at 1-3%, with an average of about 1,8%. In 2021 we still had spikes up to 6%. In 2023, in the quiet phase of the early bull, a low of 0,75% was recorded, which is very close to gold actually, gold fluctuates approximately between 0.5 and 1%.

We can extrapolate the volatility tendency. The green line (drawn through the local maximums with the exception of the COVID dump) converges with gold's volatility in less than 3 years, while the blue line (which excludes all major high and low spikes) will do so in about 5 years. So if we don't see major disruptions, it's not unlikely that the volatility problem will be history soon.

[Minor Miner]

The conclusion part of the article says this -

Bitcoin can serve as a hedge — but it’s a high-risk, high-volatility option. It behaves more like a speculative tech stock than a traditional inflation shield like gold or TIPS.

If you’re looking for protection from inflation, Bitcoin might help — or it might drop 30% in a week. Either way, it’s not a guaranteed safety net.

It makes complete sense! Bitcoin can indeed drop 30% or more in a week. It is highly volatile in nature. So I don't know what's wrong in it. This is true! That's why, investing everything into Bitcoin may give disastrous result as well.

Stocks are not a perfect inflation hedge and the article says bitcoin behaves more like stocks than traditional inflation hedges like gold, real estate or TIPS. That implicitly states that bitcoin is not an absolute inflation hedge and that is probably why the OP hates this conclusion and thinks it is wrong. But I agree with you, what they say is true to what has been happening. Bitcoin is still acting more like a stock than a safe haven like gold, TIPS, or real estate.

We can say that bitcoin is an inflation hedge but it is not guaranteed or more absolute than traditional inflation hedges like gold.

[retreat]

I just don't like it when the author calls Bitcoin digital gold, because Bitcoin is Bitcoin, and digital gold is a different product. But I agree that Bitcoin is a hedge against inflation. Just look at the value of Bitcoin increasing over time. That shows that someone who invests their money long term in Bitcoin can protect the value of their money from inflation. But only if they invest their money long term, because if they only invest short term, the price of Bitcoin tends to be more volatile, making it harder to secure profits.

[reagansimms]

The interest of various institutions or institutional investors in investing in Bitcoin is because they are increasingly aware of the great potential that Bitcoin has as a hedge against inflation and economic uncertainty that has hit several developed countries. Their move is not due to Fomo or without careful consideration, several countries that have begun to show a friendly attitude towards Bitcoin have made their confidence stronger, in other words, the increasingly bright future of Bitcoin is not just speculation, but what they have learned so far can become a reality.

If there are still those who doubt Bitcoin as a safe haven amidst economic uncertainty, then they are just people who do not follow technological developments and are trapped in a narrow mind because they do not dare to take big steps to gain big profits when the price continues to increase.

[Redley555]

Bitcoin has always been a hedge against inflation, not just this year. The thing about Bitcoin is, it's a global currency (even if not officially for some). So, when a country is struggling, people can just buy Bitcoin to protect their money from inflation. Without Bitcoin, that would be much harder to do. That’s why we should be thankful that something as decentralized as Bitcoin was created.

Think of it this way: Bitcoin is naturally volatile, unpredictable, and it doesn’t behave like traditional investments. But despite that, why are institutional investors going all in on Bitcoin? The answer to that pretty much answers the question in the OP.

Exactly, bitcoin tends to appreciate during inflation too. Companies like Black Rock can testify to that

[Free Market Capitalist]

I do not know the reason they can not end it with despite the volatility in bitcoin, it is still a hedge against inflation after a long period of time. Their conclusion will only discourage some people to invest in bitcoin.

Do not let it be late because you will understand how bitcoin is a hedge against inflation in 2028 if you read what I posted today in 2028. Bitcoin is volatile but its price increase than fall after a long period of time.

It has a limited supply but a huge demand.

I think the article is right because the examples it gives of traditional hedge against inflation are less volatile than bitcoin. Yet I argue that it is because what better than something that not only hedges against inflation but beats it by far? But I think the comparison with a (successful) tech stock is apt: it would not be a hedge against inflation in the traditional sense because of the volatility. Although for me it is much better.

[Z-tight]

Despite all the hype, Bitcoin still isn’t used much for everyday transactions:
Network fees are often $5–$15.

Oh really? What does often mean? Last time fees went above $5 was in December! That's over 5 months ago. But there's more. He claims they often reach $15 which is a blatant lie because the average fee hasn't been at these levels since June 2024.

I agree with you, and the writer forgets that BTC tx fees isn't even measured using the u.s. dollar or any other currency, but in sat/vB. However, even if we consider it using the dollar value, BTC tx fees has been relatively cheap for a very long time now, tx fees for high priority tx's is currently at 2 sat/vB as i type this. Then again for users who have the knowledge to use coin control and consolidate their inputs, they save up on fees very well.

[DanWalker]

Despite Bitcoin's glaring potential and performance over the years, proving it to be a hedge against inflation, some people will still never seek refuge in Bitcoin.
Meanwhile, this is due to their naive understanding and unwillingness to learn new things. I read a celebrity comment days ago that most celebrities are not Bitcoiners because most of them never plan to learn new things after graduating from university or receiving PHD due to their belief in having adequate knowledge.

The second reason is misinformation, and posts that would cause FUD when newbies read posts by some crypto platform, which the news platform you quoted is an example.
I hope we can all play our roles in letting the newbies have access to the right information about Bitcoin and the entire crypto market at large.

It's not due to ignorance or misinformation on the internet, I think it depends on each person's different concept of inflation hedge. Tech stocks like AAPL, TSLA, NVDA...have also done well over the years but do you consider them a good hedge against inflation? Not to mention, compared to traditional inflation hedges like gold, bitcoin offers good returns but is volatile and prone to short-term dumping. Or reasons related to popularity, legality...that could be the reason why many people still hesitate to choose bitcoin as an inflation hedge.

Everyone has their own choice and bitcoin is not the only inflation hedge in the world, we don't need to feel bad just because they don't choose bitcoin.

[Ishicryptic]

Do not let it be late because you will understand how bitcoin is a hedge against inflation in 2028 if you read what I posted today in 2028. Bitcoin is volatile but its price increase than fall after a long period of time.

It has a limited supply but a huge demand.

In summary you have defined why Bitcoin is a hedge against inflation in 2025 and beyond, despite that Bitcoin is volatile it's price increases more than it decreases on the long term. Also Bitcoin has a limited supply and it's adoption and demand keeps increasing, this will make it's price to continue to increase on the long term. Bitcoin has proven since it's creation that it has potentials to reach ATH and this is the major reason why more institutional and retail investors are getting in to stash their bags for long term continuos profits. In the next two circles I believe that those that are still undecided now will look back and regret where they did not get in.

[bitgolden]

It's definitely a hedge against inflation and will continue to be so due to the principles it's based on which can always attract strong demands that are stronger than its "ever" decreasing supply,  leading to continuous price gain, but this depends on certain key factors that are considered good for the Bitcoin system.

I wouldn't count the volatility as an issue as it's not that high. And it can't be a sustainable/proper hedge against inflation without that kind of volatility otherwise price will keep going up without ever going doing down and vice versa. The proper way to fluctuate and become a sustainable hedge against inflation is to go up more and down less. And when this is happening it's seen as volatility. But how can it be a hedge against inflation without behaving in that manner. If it fluctuate very little like fiat currencies prices of goods and services will keep going up against it as they become scarce. So, the fluctuations, especially upward movements, have to be big enough to make it a hedge against inflation. Its principles and certain important factors make this happen organically rather artificially like how price of fiat currencies are controlled.

While it is true that we are going to use it as hedge against inflation and will always be a winner, that is a true statement for the long term holders. If you end up panic selling when the price goes down then you are not going to get the best result out of this and you shouldn't be worried about it. I get that it may not look great at the moment but price is going up at least, sure I want it to go up even more but it is not growing forever and what we need to see is people holding and to going down.

We had a period where it peaked at 108k or so, and then dropped to 70k and that is the most important part, if you can do that then you are going to realize that it is going to be a good thing you can use as investment. If you do that then you will realize holding will make you hedge against inflation but panic will make you lose.

[Mame89]

I just don't like it when the author calls Bitcoin digital gold, because Bitcoin is Bitcoin, and digital gold is a different product. But I agree that Bitcoin is a hedge against inflation. Just look at the value of Bitcoin increasing over time. That shows that someone who invests their money long term in Bitcoin can protect the value of their money from inflation. But only if they invest their money long term, because if they only invest short term, the price of Bitcoin tends to be more volatile, making it harder to secure profits.

I totally agree with you. These two assets are different and have different characters. So, it is not right to say that bitcoin is digital gold. Gold is gold and bitcoin is bitcoin.

The very rapid growth of bitcoin in recent years has made bitcoin believed to be a hedge, this is very reasonable because if we go back to the basics, Bitcoin was created to withstand the rate of inflation.

So it is not surprising that if a country reports its inflation is above normal, then Bitcoin will increase, the increase in Bitcoin can indeed be delayed if interest rates are raised. But we also know, interest rates can only fight inflation in the short term, because it is also impossible if you like interest rates to be raised continuously. This is different from bitcoin which can fight inflation in the long term so Bitcoin is the best hedge asset today.

[Agbe]

I believe that Bitcoin is a hedge against inflation because inflation involves the increase in the price goods and services which will in turn decrease the value or purchasing power of the currency involved and Bitcoin is one thing that has shown a steady growth Bitcoin is one thing that is not by the economy of any country so the probability of bitcoin decreasing in price over time is low so investing in Bitcoin will give people a better security for their money ad Bitcoin is a store of value, if you have $10k in 2025 its better that you invest it in Bitcoin because if you don't invest in Bitcoin the value of that money will definitely drop in the next one year due to inflation but investing in Bitcoin means that you are securing it against inflation because Bitcoin is one thing that is associated with steady growth over time one time that many people who are into crypto don't know is that inflation is a key factor that contribute to the price of Bitcoin so it should not be  used as an excuse

[Davidvictorson]

I do not see anything wrong in how the article was concluded. It is just what it is, that is the opinion of the author of that article. I have always known that bitcoin is a hedge against inflation since my country's currency value dropped so bad that it has become almost worthless. Bitcoin is yet to become stable and it makes me think about institutions that have bought into Bitcoin how is the conversation like when the price drops. Is it a buying opportunity for them or they just decide to hold on and watch the market before making their next move.

[rodskee]

Despite Bitcoin's glaring potential and performance over the years, proving it to be a hedge against inflation, some people will still never seek refuge in Bitcoin.

is it possible that eventually bitcoin gets used by everyone and the rest ends up seeing how helpful bitcoin can be and start using it as well or those who are left behind will always be left behind and it will be too late for them? because at some point they should see that bitcoin will just speak for itself at some point they will lose reasons to not trust bitcoin

[Ojima-ojo]

Bitcoin untaxed will definitely be an edge against inflation most especially for those that go in long on bitcoin, let say in 2028 those that bought bitcoin at $50,000 price will already be worth x7 without tax and for sure alot will be happening in terms of how the investor purchasing power will be greatly increased with all the profit that comes in from this asset.


In my own thoughts, inflation will only set into bitcoin; when government and cooperation get involved and being able to have bitcoin fully taxed, and this is not possibly happening so yeah, bitcoin is the sure way to stay above inflation.

[Iranus]

Bitcoin has always been a hedge against inflation, not just this year. The thing about Bitcoin is, it's a global currency (even if not officially for some).

Bitcoin is very volatile, it can be dumped suddenly, so it is a hedge against inflation but this is only true in the long term, not in the short term, IMO.
If you buy bitcoin now and use it as an inflation hedge, but unfortunately, the market enters a bear market and drops below $50k. Is it still an effective inflation hedge?

So, when a country is struggling, people can just buy Bitcoin to protect their money from inflation. Without Bitcoin, that would be much harder to do. That’s why we should be thankful that something as decentralized as Bitcoin was created.

Bitcoin is not the only inflation hedge in the world, we have more effective inflation hedges like gold, real estate or TIPS.

Think of it this way: Bitcoin is naturally volatile, unpredictable, and it doesn’t behave like traditional investments. But despite that, why are institutional investors going all in on Bitcoin? The answer to that pretty much answers the question in the OP.

Because they are investors and they are also looking for profit just like us. Wherever there is profit, they will invest in it, not just bitcoin.

[suzanne5223]

Despite Bitcoin's glaring potential and performance over the years, proving it to be a hedge against inflation, some people will still never seek refuge in Bitcoin.
Meanwhile, this is due to their naive understanding and unwillingness to learn new things. I read a celebrity comment days ago that most celebrities are not Bitcoiners because most of them never plan to learn new things after graduating from university or receiving PHD due to their belief in having adequate knowledge.

The second reason is misinformation, and posts that would cause FUD when newbies read posts by some crypto platform, which the news platform you quoted is an example.
I hope we can all play our roles in letting the newbies have access to the right information about Bitcoin and the entire crypto market at large.

It's not due to ignorance or misinformation on the internet, I think it depends on each person's different concept of inflation hedge. Tech stocks like AAPL, TSLA, NVDA...have also done well over the years but do you consider them a good hedge against inflation?

I said it is due to ignorance or misinformation because no investors will know that accumulating a certain asset now will get him/her 100x multiplier and choose not to accumulate. Besides, one of the rules of the investment market is to diversify investments to reduce the risk and improve the returns.
Yes, the AAPL, TSLA, NVDA, etc. Did well, but things are changing as investors; there should always be room for more because the investment market is constantly changing. So, I don't see AAPL, TSLA, and NVDA as hedge against inflation.

Not to mention, compared to traditional inflation hedges like gold, bitcoin offers good returns but is volatile and prone to short-term dumping.

Agreed, but have you ever noticed that to whom much is given, much is expected? We can expect these assets to present a great opportunity and never have a great disadvantage (of which it can be correct if we understand the market).

Or reasons related to popularity, legality...that could be the reason why many people still hesitate to choose bitcoin as an inflation hedge.

Everyone has their own choice and bitcoin is not the only inflation hedge in the world, we don't need to feel bad just because they don't choose bitcoin.

Maybe, but if we ask people on the street, you'll see that some people are yet to know Bitcoin.
I don't feel bad about some people's decision towards Bitcoin, I am just surprised that its innovation and potential are written in front of some people but yet they didn't see it.

Despite Bitcoin's glaring potential and performance over the years, proving it to be a hedge against inflation, some people will still never seek refuge in Bitcoin.

is it possible that eventually bitcoin gets used by everyone and the rest ends up seeing how helpful bitcoin can be and start using it as well or those who are left behind will always be left behind and it will be too late for them? because at some point they should see that bitcoin will just speak for itself at some point they will lose reasons to not trust bitcoin

I believe they are already losing for not trusting Bitcoin as we speak, because they are not following the rules of the investment market, which is maximizing the market and starting to invest early.
Having said that, I consider those that are yet to invest in Bitcoin as dumb money because if giant companies that are known for controlling over 40% of the investment space worldwide file for BTC ETF, people with the right investment sense ought to miss the boat.

[john_egbert]

is it possible that eventually bitcoin gets used by everyone and the rest ends up seeing how helpful bitcoin can be and start using it as well or those who are left behind will always be left behind and it will be too late for them? because at some point they should see that bitcoin will just speak for itself at some point they will lose reasons to not trust bitcoin

Fudsters and such will always be there.

It will be just harder for them, so to speak, get into the game and see for themselves why they were wrong from the start.

[l3pox]

MicroStrategy and El Salvador has been an eye opener to other institutions and government to see that bitcoin is an hedge to inflation overtime. It's funny to see that every investor or institution who already know about bitcoin after the price hits $100k are eager to invest in bitcoin to save their funds from inflation.

This bull run has really cleared the doubt in many peoples mind who were against bitcoin in the beginning and currently, they are trying to see how they can buy aggressively overtime. Bitcoin is a store of value and that's why we are lucky to be part of the train because bitcoin is still in her early stage.

exactly
now even in Brazil there's a company called "méliuz" who put 10% of their treasury in Bitcoin, that was a total of 42 BTC if I'm not wrong
this will probably be more and more common as time goes by
I've heard of one in Japan who did the same too, Metaplanet or something like that

now it's clear that bitcoin will pass 1 million dollars and flip gold's market cap, it's just a matter of time