And as it gradually matures and establishes itself in the financial markets, this debate is gaining in importance. How, then BTC actually survived?
Bitcoin after a relatively dramatic week and reaching ATH at $ 69,000, it has declined today to $ 58,600. Over the past year, its crypto has received 311.43% ROI for its HODLers. investment) versus USD. In fact, despite price consolidation, bear months, and many FUD reports, the narrative seems to be BTC as a hedge against inflation constantly strengthening.
Is therefore Bitcoin by securing against inflationwhich could save the situation? This question now seems more relevant than ever. Reason? The US government announced that its index consumer prices (CPI – Consumer Price Index) rose by 6.2% compared to the previous year – the largest 12-month jump since 1990.
Soon after the stock announcement futures declines while yields bonds have risen sharply. On the other hand, it also increased gold, which holds the “security against inflation“For a long time. It’s interesting, that Bitcoin he followed, at least for now.
“Numbers inflation in the US reach a 30-year high “, source: IntoTheBlock
In fact, amid growing news inflation, price BTC recorded a new all-time high of over $ 69,000 on November 10. In addition, a Bloomberg report found that Bitcoin in the last 10 let reached 99.996% deflation. Remarkably, for the price of one Bitcoinu in 2011 only 0.004% can be bought today Bitcoinu. Meanwhile, the CPI rose by 28% in dollars over the same period.
Although economists estimate that about half of the price increase Bitcoinu over the past few months has been caused by concerns about inflation and the other half due to the development of trading, how much is actually true?
BTC still lacks value
Taking a deeper look at capital markets it can be observed that Bitcoin in fact, it is increasingly correlated with inflation expectations.
Historical correlation, source: IntoTheBlock
ProShares’ ETF (RINF) inflation expectations follow a long-term breakthrough inflation, which is a widely monitored measure of inflation expectations. It is noteworthy that the correlation BTC with RINF reached a historic high of 0.95 at the end of October, which only highlighted how Bitcoin and inflation expectations ranged in tandem.
Although the price Bitcoinu within 2 hours of the report on inflation increased by almost 4%, then decreased by 8% just a few hours later. What was that supposed to mean?
First, this price movement has indicated how the disruption of the traditional market is still affecting BTCbecause its market capitalization is not yet large enough to absorb market anomalies. In retrospect, it is noteworthy that market capitalization BTC currently stands at $ 1.146 trillion, while market capitalization gold is $ 11,844 trillion. This suggests the size of the market gold was 1,033.5% larger than the size BTC, which is more than 10x the difference.
In addition, while a limited offer BTC makes it an ideal hedge against inflation, the market ‘s position on this potential role is still inconclusive. All the more so when higher inflation may evolve further by raising interest rates. As has been said while Bitcoin in the last 10 let reached 99.996% deflation, it is also important to note that “Bitcoin has not yet gained enough trustso that it can be considered as guaranteed security against inflation.“
Maybe over time it may function Bitcoinu as hedgi against inflation further strengthen. For now, looking at the statistics, it seems that BTC could be the next best bet on “hedge against inflation“. And there is good reason for such optimism. After all, market capitalization BTC is now only about two billion dollars lower than the market capitalization silver. And as its market capitalization grows, it will most likely strengthen its role as discussed.
Source: ambcrypto.com
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