How does Bitcoin protect people from inflation?

[josscrypto]

Thank you for this topic, I am learning a lot. I am from Philippines where inflation is high and our peso loses value. From what I understand, Bitcoin protects from inflation because it has limited supply of 21 million, unlike peso that government can print. As a beginner, I am still learning how to properly store it safely. Do you think Bitcoin can really protect small earners like me who can only save small amount? Thanks for any guidance.

[Tungbulu]

That's a fair point, and it's justified economically. Ideally, all good investments are supposed to shield people from inflation, no matter how little. And in the case of Bitcoin, it did it well, but Bitcoin's price is now expensive. You can't compare how it would shield people who bought it at $50 against inflation with those people who bought it above $100,000. We should be realistic.

One thing that’s worth noting is that most investors ain’t actually buying all their bitcoin at once, and the $50k vs $100k comparison only really affects folks who literally went all in at the peak. If an investor has been or is gradually staking his sats every month for years, he’ll definitely end up with a blended entry that’ll potentially smoothen most of that out.

[Berry2d]

Bitcoin's market price can fall dramatically, even while inflation is high. Research and financial institutions have noted that Bitcoin's relationship with inflation is not strong enough to call it a reliable inflation hedge.

That's a fair point, and it's justified economically. Ideally, all good investments are supposed to shield people from inflation, no matter how little. And in the case of Bitcoin, it did it well, but Bitcoin's price is now expensive. You can't compare how it would shield people who bought it at $50 against inflation with those people who bought it above $100,000. We should be realistic.

Besides, renown authors like Benjamin Cowen, Michael Harris, etc had postulated the diminishing returns in Bitcoin, which is more feasible now, and would increase as the price grows. Some countries inflation is so bad to the point of 10x in 10 years or so, but let's just say 5x in 10 years. At current levels of about $80,000, do you think Bitcoin would be $800,000 in 10 years? If you say yes, then you are a dreamer.

Of a truth the way bitcoin will shade those that invested when bitcoin price was 50$ can not be the same as that of those who invested when it climbed to 100$ but the truth is,  from where ever it was met one most get that protection we seek.
The only difference both investors have is there time of investment and price from when their investment was done if not both are enjoying same protection because Bitcoin operates at flat rate to all without minding the level of investment anyone has.

It will be a dream come through if Bitcoin gets to $800,000 in ten years from now because that have been the dream of all investors presently now but am not sure if that can come to manifestation.

[Mahiyammahi]

I don't think Bitcoin can protect people from inflation because it's price is volatile and it can fall even when inflation is high

Actually, it depends. If you are comparing Bitcoin as a hedge of inflation, then you need to consider the time frame. If you are watching Bitcoin time frame in a short time frame, then you might made losses in Bitcoin. But on a larger time frame, it always hedges against fiat currency. Not only that, it has the opportunity to surge the price even more. And in every cycle, the Bitcoin is creating a new ATH. So even though the price is much volatile, but it has a option to go even higher than before.

[Cookdata]

Thank you for this topic, I am learning a lot. I am from Philippines where inflation is high and our peso loses value. From what I understand, Bitcoin protects from inflation because it has limited supply of 21 million, unlike peso that government can print. As a beginner, I am still learning how to properly store it safely. Do you think Bitcoin can really protect small earners like me who can only save small amount? Thanks for any guidance.

Fiat is a killer of fiat currency, many people don't know the consequences of inflation. I checked Philippines what was pesos to dollar 5 years ago, it was around 50 pesos to a dollar but today it's trading around 63 pesos, that means if you have been holding your pesos in your account in the last 5 years as savings, you have lost more than 20% of the original value in 5 years. If you compare the growth to what Bitcoin has done 5 years, you would have been able to retain the value of your money and increase it by quarter value. You country is fair, I don't know what to say about mine, it's terrible than it looks.

People don't know about inflation and how deep they have loss their values and investment. There are some people that has made investment in landed property that within the time range of 5 years, they are yet to get half of what Bitcoin would have given them. What makes Bitcoin even special is the fact that you can sell it any time, you can't do the same with other investments even if they protect you against inflation.