Myth breaker: Bitcoin UP after lower inflation predictions...

[legiteum]

Story:
"Bitcoin Rebounds Above $61K As Fed Chair Warsh Eases Inflation Fears

https://yellow.com/news/bitcoin-rebounds-61k-fed-warsh

In other words, based on a report indicating that inflation will be DOWN, Bitcoin went UP. That's the opposite of a narrative we hear about Bitcoin over and over again.

Can people please stop saying that "Bitcoin is a hedge against USD inflation"? It's not.

Bitcoin is a meme investment instrument and it moves with the markets just like any other stock, ETF, or any other investment, insofar as it stays popular.

If you want a stable hedge against USD inflation, the only realistically viable investment today is TIPS. Yes, you trust the US government to not go belly-up, but if you are betting against that, you are betting on the entire civilized world crumbling and there won't be a working internet in that world, let alone the massive liquid markets required to buy all of your Bitcoin.

[Oshosondy]

Even if it happens as it supposed to be, it will only last within few hours our one or two days. I have posted that several times that what that bitcoin follows is its bear or bull period, other things are just distractions. The bull market has not started yet, but supposing it has started, there is nothing that can change it, even the bad news can not, but their effect will be temporary and be within a short period of time.

[Ambatman]

Can people please stop saying that "Bitcoin is a hedge against USD inflation"? It's not.

Economics usually focus on the long run  
Bitcoin's fixed supply of 21 million is hardcoded unlike fiat that central banks print endlessly
This to me is necessary to be called an hedge against Monetary debasement.

$7000 ten years ago could have bought more than a dozen of Bitcoin
But now it can only buy some unit. I think this should be self explanatory.

only realistically viable investment today is TIPS

Relying on the government to accurately measure and pay out inflation protection
Like the problem was created by Aliens in the first.

In other words, based on a report indicating that inflation will be DOWN, Bitcoin went UP. That's the opposite of a narrative we hear about Bitcoin over and over again

Humans are sentimental
People react differently in the short to mid term especially in respect to expected rate cuts or not.
People tend to buy or sell the future
Low inflation - possible rate cut down-possible increase inflation and in the center of all this Bitcoin rises.

The market doesn't react simply to 'inflation'
It reacts to what lower inflation implies.




I won't deny that you also do have a point.

[legiteum]

Can people please stop saying that "Bitcoin is a hedge against USD inflation"? It's not.

Economics usually focus on the long run  
Bitcoin's fixed supply of 21 million is hardcoded unlike fiat that central banks print endlessly
This to me is necessary to be called an hedge against Monetary debasement.

Literally millions of investments have a fixed supply. In fact, basically all investments you can choose have either a fixed supply, or a supply that increases in a way that's fully predictable.

Saying, "Bitcoin is great because it has a fixed supply" is like saying, "the Toyota Camry is great because it has wheels".

$7000 ten years ago could have bought more than a dozen of Bitcoin

$7000 one year ago = $3500 today. Oops.

$7000 in NVDA ten years ago = $1.8 million today. If you time any investment perfectly you make gigantic returns.

only realistically viable investment today is TIPS

Relying on the government to accurately measure and pay out inflation protection
Like the problem was created by Aliens in the first.

Oh yeah, those damn... aliens... 👽👽👽

I won't deny that you also do have a point.

Thanks.

[Ruttoshi]

Do Fiat increases in value overtime. This is why bitcoin bitcoin is an hedge to Fiat because they're both currency. The decentralized nature of bitcoin and censorship resistance makes it more unique to Fiat because Fiat is the opposite of bitcoin.

There's no need comparing apple to oranges because the difference is clear. As for the price movement of bitcoin, it's been controlled by investor sentiment. The price pump up doesn't mean that it wouldn't dip again below this current price.

[legiteum]

Do Fiat increases in value overtime. This is why bitcoin bitcoin is an hedge to Fiat because they're both currency. The decentralized nature of bitcoin and censorship resistance makes it more unique to Fiat because Fiat is the opposite of bitcoin.

Only very poor/unwise people keep their savings exclusively as piles of physical cash. Most people with any significant savings put their money in places it will grow. BTC does not compete with USD, it competes with NVDA or GOOG or thousands of other stocks, bonds, ETFs, and real estate.

[Franklyn-wood]

Do Fiat increases in value overtime. This is why bitcoin bitcoin is an hedge to Fiat because they're both currency. The decentralized nature of bitcoin and censorship resistance makes it more unique to Fiat because Fiat is the opposite of bitcoin.

There's no need comparing apple to oranges because the difference is clear. As for the price movement of bitcoin, it's been controlled by investor sentiment. The price pump up doesn't mean that it wouldn't dip again below this current price.

Sure the pump is an advantage to does who maybe scared of losing there investments also for those who consider selling at this point for more profits, but while when are enjoying the pump we should also prepare for the dip as well. Just like inflation and deflation happens to fiat from time to time. Market positive specullation influences Bitcoin pump while the negative  news create fear in the heart of prospective investors.

[SquirrelJulietGarden]

Can people please stop saying that "Bitcoin is a hedge against USD inflation"? It's not.

Bitcoin is Bitcoin and it is what it is.

People don't have to agree with each other about what Bitcoin is, like "Bitcoin is a hedge against USD inflation". People always disagree with each other, not only with Bitcoin, so I don't have need of changing thinkings of the others. Like if you wanted other people believe that "Bitcoin is NOT a hedge against USD inflation", there will be other people who want to convince the opposite information.

Let's find an asset that can help you growing your wealth with time, and Bitcoin can be a good asset like that.
Hedge against USD inflation or not, I don't feel need of proving it with anyone else.

[Wind_FURY]

?

Laughable. OP might be playing "4D Chess"/Trolling, Bored or he/she is merely Confused. OR it's probably all three of them.

 

Short Term - Bitcoin UP because of its volatile nature no matter what the Federal Reserve Chairman says. It may, or may not, affect Bitcoin's price.

[legiteum]

Let's find an asset that can help you growing your wealth with time, and Bitcoin can be a good asset like that.

If you invested your savings in Bitcoin a year ago, you would only have half of your savings left. That's a disaster for most people. Even worse, if you invested in the stock market, you'd have 40% more money in the same period.

Maybe Bitcoin will go up, but... maybe it won't. No matter what your guess is, there's no way you can say it's a stable long-term asset, and it's the very worst thing to hold if you are a passive investor who doesn't watch the market every day.

[Danica22]

Can people please stop saying that "Bitcoin is a hedge against USD inflation"? It's not.

Sixteen years ago, with 1 USD you could buy a lot of bitcoins. But currently, you need to spend over $60k to own 1 BTC, and you may need to pay $100k or even $200k for the same 1 BTC in the next few years. Do you still deny that Bitcoin is a hedge against the inflation of the USD?

An inflation hedge does not have to rise in value or preserve purchasing power at every point in time. Importantly, it has the potential to maintain or increase its value in the long term as the purchasing power of fiat gradually declines.

[legiteum]

Can people please stop saying that "Bitcoin is a hedge against USD inflation"? It's not.

Sixteen years ago, with 1 USD you could buy a lot of bitcoins. But currently, you need to spend over $60k to own 1 BTC, and you may need to pay $100k or even $200k for the same 1 BTC in the next few years. Do you still deny that Bitcoin is a hedge against the inflation of the USD?

An inflation hedge does not have to rise in value or preserve purchasing power at every point in time. Importantly, it has the potential to maintain or increase its value in the long term as the purchasing power of fiat gradually declines.

One year ago, with 1 USD you could buy (a certain amount of Bitcoin), and now you can by twice as much Bitcoin with that same amount of USD.

Meanwhile, if you bought NVDA stock, you'd have far more money than you have now.

There is absolutely no tangible evidence that Bitcoin will go up in value forever. The only thing I hear the permabulls provide as evidence is that Bitcoin is limited in supply, but they only say that because they've never invested in anything else in their lives because they'd know that almost all investments work that way and that's not some kind of feature that is unique to Bitcoin. It's like saying your new car is unique because the wheels are round.

[Alpha Marine]

You've mastered the act of picking various unrelated things and putting them together to form a theory. And you've also mastered the act of taking things out of context.
So if Bitcoin price goes up when reports suggest that inflation will be down, it means saying that "Bitcoin is a hedge against inflation? is wrong?
So whenever there is news that inflation will be down, people should just start converting their Bitcoin to USD?
I know you're smarter than this. You can't keep forcing all these unintelligent narratives and forced theories just to fit your narrative.
There is no point explaining how Bitcoin is a hedge against inflation because I know you know it, but you just want to push a narrative, or do I give you too much credit?

[el kaka22]

It is not, never was. Bitcoin doesn't care about what happens in the world, and it's irrelevant, it has always followed the same four year cycle and it will continue to follow that. If the bull year (like 2021 or 2025) happens to be in a low or high inflation, it will still go up, that's just how it is.

We shouldn't really react to it like it matters because that one doesn't matter at all. I understand some people hopes that it is correlated but it's not  and never was. We should expect this to be changing for the long term and when that happens we are going to see things be a bit different.

[legiteum]

There is no point explaining how Bitcoin is a hedge against inflation because I know you know it, but you just want to push a narrative, or do I give you too much credit?

Bitcoin is extremely volatile in its price and isn't a consistent hedge against anything. It's like calling sports betting a "hedge against inflation".

The story's point was that an ordinary factor for the financial markets moved the price of Bitcoin up. It's the same kind of factor that would move any other investment instrument up in price. That tells you that Bitcoin is looked at by investors as just another button to push, not an inflation hedge.

Look, I get it: you are 1000% certain that Bitcoin is going to go up in price forever, and there's no arguing with something for which there is no evidence. Bitcoin might go up, and it might go down. Five years from now it might be at $1 million, and it might be at $1000. Nobody actually knows because it's dependent on the whims of investors.

But if you want to "believe" in something on faith, that's obviously your business...

[Danica22]

One year ago, with 1 USD you could buy (a certain amount of Bitcoin), and now you can by twice as much Bitcoin with that same amount of USD.

Meanwhile, if you bought NVDA stock, you'd have far more money than you have now.

As I said, an inflation hedge does not necessarily have to increase in value or maintain purchasing power all the time, and every market has its own cycle.
Why would you deny its growth over the past 17 years, or the fact that it increased from $15k to $120k in just the period of 2022-2025?

There is absolutely no tangible evidence that Bitcoin will go up in value forever. The only thing I hear the permabulls provide as evidence is that Bitcoin is limited in supply, but they only say that because they've never invested in anything else in their lives because they'd know that almost all investments work that way and that's not some kind of feature that is unique to Bitcoin. It's like saying your new car is unique because the wheels are round.

The same is true for stocks such as NVDA, AAPL, MSFT, and GOOGL. There is no evidence or guarantee that they will continue to grow forever.

I agree with you that many Bitcoin investors tend to exaggerate its potential unnecessarily. But the truth is that Bitcoin still has growth potential, and it has proven its role as an inflation hedge and a long term store of value.

[legiteum]

One year ago, with 1 USD you could buy (a certain amount of Bitcoin), and now you can by twice as much Bitcoin with that same amount of USD.

Meanwhile, if you bought NVDA stock, you'd have far more money than you have now.

As I said, an inflation hedge does not necessarily have to increase in value or maintain purchasing power all the time, [...]

Actually, that's the exact definition of a "hedge against inflation".

When you tell investors "hedge against inflation", that's what they are expecting.

Why would you deny its growth over the past 17 years, or the fact that it increased from $15k to $120k in just the period of 2022-2025?

Why would you deny a bet on Egypt yesterday making you a 60% profit on your investment? Anybody can cherry pick an investment period for any investment or bet and say that, in hindsight, it was a good investment. But predicting the future requires a very different argument, and must go far beyond simply pointing at specific periods when the price went up (and ignoring other periods when the price went down).

The same is true for stocks such as NVDA, AAPL, MSFT, and GOOGL. There is no evidence or guarantee that they will continue to grow forever.

Correct. There is strong evidence that those particular companies will do very well in the coming couple of quarters though.

Any person selling you an investment that they say you can "buy and forget" is lying to you. There is virtually no investment like that, the closest thing being TIPS (which depends on the US government remaining solvent). No matter what you invest in, you must remain diligent, and sell your instruments when you think the price will go down, and buy instruments you think are undervalued. This isn't easy, but the world doesn't owe you guaranteed returns.

But the truth is that Bitcoin still has growth potential, and it has proven its role as an inflation hedge and a long term store of value.

It's proven it has growth potential (just like sports betting has "growth potential", as does almost anything), but it has certain not proven to be a consistent inflation hedge, only an asset that has gone up and down in the past.

[Zoomic]

Story:
"Bitcoin Rebounds Above $61K As Fed Chair Warsh Eases Inflation Fears

https://yellow.com/news/bitcoin-rebounds-61k-fed-warsh

In other words, based on a report indicating that inflation will be DOWN, Bitcoin went UP. That's the opposite of a narrative we hear about Bitcoin over and over again.

Do you actually expect Bitcoin to mirror every inflation report? Such expectation isn't totally out of point but it'll probably leave you disappointed some times.

Can people please stop saying that "Bitcoin is a hedge against USD inflation"? It's not.

You're oversimplifying Bitcoin when you say that it can't be a hedge because it rallied after lower inflation. The Bitcoin market reacts to different factors like liquidity, sentiments and many other things in the short term but that doesn't take away the fact that Bitcoin is a long-term hedge against the USD.

[Alpha Marine]

Bitcoin is extremely volatile in its price and isn't a consistent hedge against anything. It's like calling sports betting a "hedge against inflation".

This dude.
Here we go again with completely unrelated analogies.
Is gold a hedge against inflation? I mean, even you can't bring up unrelated analogies as you always do to dispute the fact that gold is a hedge against inflation.
Is gold volatile? Even you would agree that gold is volatile in the short term. So does the volatility of gold stop it from being a hedge against inflation?
Gold as a store of value is volatile in the short term, but over time, it maintains its value.

Look, I get it: you are 1000% certain that Bitcoin is going to go up in price forever, and there's no arguing with something for which there is no evidence. Bitcoin might go up, and it might go down. Five years from now it might be at $1 million, and it might be at $1000. Nobody actually knows because it's dependent on the whims of investors.

It doesn't have to keep going up forever; it fucking fluctuates. That is what a financial asset/instrument does. Even stablecoins don't stay stable.
The USD is regarded as the best currency today, and most countries hold it as a reserve, but it doesn't stay stable. What matters is that it still maintains a certain level after a long term.

Bitcoin fluctuates daily. It has dips and bear markets, but in the long term, it maintains its value, or even goes higher. That is why people advise that Bitcoin is best as a long-term asset.

Saying "There is no proof" is crazy when the Bitcoin price history is literally there for you to see.

And yes, it is not 100% certain that the price of Bitcoin will increase. There is no asset with a 100% guarantee in this regard, but based on price history, there is a 99% chance that the Bitcoin price will be higher than it is today in five years.

[PrivacyG]

Maybe Bitcoin will go up, but... maybe it won't. No matter what your guess is, there's no way you can say it's a stable long-term asset, and it's the very worst thing to hold if you are a passive investor who doesn't watch the market every day.

Casascius holders would like to have a word about your statement.