Greetings,
So to my understanding Bitcoin during this adoption phase is more useful as a hedge against inflation (aside from being a great investment) than an actual currency since we are still two decades from having the entire supply mined and until then it is expected to appreciate consistently. I also watched a video with an interesting point concerning why bitcoin cannot truly replace hard currencies like the US Dollar given the credit/loan/welfare based society that we currently live in. This is perhaps the difficulty of not being centralized and able to freely print (as polarizing as that topic itself can be). Now crypto is certainly in its infancy and there is potential for systems or ideas to potentially account for the need of credit or supply increases, but it sounds like fundamentally, it serves best as an alternative method that operates on scarcity characteristics similar to gold but with the extra perk of being secure, decentralized and potentially cutting out third parties fees (although exchanges are operating and profiting in this space for now).
With that being said, how can Bitcoin or other cryptocurrencies help during a hypothetical or potential inflationary crisis? The Weimar Republic departing from the gold standard and printing ridiculous amounts of money to pay war reparations ultimately led to the collapse of the middle class and provided sentiment for WWII, would having an asset similar to Bitcoin during this period make any difference for people or the government in a situation like this? Would benefits only really derive from governments pegging currency to Bitcoin reserves or having institutional funds, companies and normal people putting money into Bitcoin for the period of extreme inflation to retain value?
I guess another potential interpretation is how Bitcoin will be used in the coming potential inflationary crisis if ‘transitory’ inflation turns out to be a lot more permanent than the Fed is letting on.
Also explanations on what exactly Bitcoin’s future is if you share the belief that not being able to increase its supply or have monetary policy to combat potential crises would be nice to hear or be directed to content about.
Welcome videos, books or any medium of information.
Thanks
Inflation Pros & Cons – Participate in the r/CC Cointest to potentially win moons. Prize allocations: 1st – 300, 2nd – 150, 3rd – 75.
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Believe it or not, people would be selling off BTC and all assets to get money in any crisis. Don’t let anyone else tell you otherwise.
Most people act only base on emotions
This is so true. Even if the dollar hyperinflated and crashed the worldwide financial system, you’d see people selling off everything to get basics like food and medicine.
… and the few, the calm, would profit more than most people would in a 10 year bull.
Does this change if Bitcoin was recognized as an official currency in developed countries and able to be used in stores?
Basically 1 BTC = 1 BTC. We know that there’s only 21 million in existence, so it’s a pretty good buffer against hyperinflation if you look at it in satoshis
thats the genious about it! Its limited!
It’s just a store of value, really. Like how Gold, stocks, properties, etc. could act as hedge against weak fiat.
True, I get that. The context of this question is that I am trying to write a paper concerning Bitcoin and I’m searching for some sort of macroeconomic correlation or implications of Bitcoin’s growth or volatility, whether it potentially could be effective against inflation or even just figuring out what is the opportunity cost or effect of trillions of dollars being siphoned into the crypto market where it otherwise would have gone somewhere else. I’m definitely looking hard for some kind of effect or find out what is suffering at the expense of bitcoin, but the more I dive into aspects of Bitcoin the less I come out with in terms of what it is doing to the global economy or any macroeconomic factor. Sort of need help in finding out where to look
I don’t get how BTC is a hedge against inflation if it can dip -25% just in one day and if global crisis happens, it’ll sure dip much more than that.
Because it hasnt been used as a store of value for all of recorded human history and is far more complicated to explain than a gold coin. As market cap, acceptance, and general understanding of crypto increases, the volatility will decrease.
All fiat trends to 0 against hard assets. This has been true for all fiat currencies in history and will be true for the US dollar against bitcoin. Bitcoin has the best chance of protecting your purchasing power due to it being the first provably scarce asset in the world.
Yeah gold is viewed as scarce, but we develop new technolgies all the time to mine gold in places once thought impossible to access and places it wasnt even known to exist. We really have no idea how much gold could actually be on the planet, so bitcoin>gold in my opinion as an inflation hedge.
People always have and always will sell it for fiat in a crisis! They consider btc an asset so they want it to increase their fiat so they have more of it to spend!
BTC is still magic internet coins for becoming rich for most of the people, whenever crisis hits.. It drains because people still don’t trust it.
True, but if it is adopted does that not somewhat legitimize it’s value as an inflation hedge? However, I guess the prices of things would still be significantly higher, regardless if you pay in bitcoin or not. I guess the issue when comparing Gold to Bitcoin is that Gold itself has historic relevance and is in itself visually appealing in that sense that those who discovered it or came across it would have a natural instinct of its value. Creating an intrinsic value of Bitcoin becomes difficult. I’m not really sure what is going to protect the value of Bitcoin once it is all mined because in any case it will simply just be a digital asset that no longer has the same potential for rapid appreciation unless it is accepted as currency in many places or have significant systems built around or based on it.
I say yes, or no. Don’t know
Bitcoin Pros & Cons – Participate in the r/CC Cointest to potentially win moons. Prize allocations: 1st – 300, 2nd – 150, 3rd – 75.
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Well… traditionally btc i’s a hedge against inflation. So why would you use it and sell it? Unless desperate for currency that is widely accepted i.e mortgage, bank etc.
12 decades left, final one is estimated to be mined in February 2140, just FYI.
At current technological limits. Quantum computing will likely speed that timeline up quite a bit.
Inflation Pros & Cons – Participate in the r/CC Cointest to potentially win moons. Prize allocations: 1st – 300, 2nd – 150, 3rd – 75.
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Believe it or not, people would be selling off BTC and all assets to get money in any crisis. Don’t let anyone else tell you otherwise.
Most people act only base on emotions
This is so true. Even if the dollar hyperinflated and crashed the worldwide financial system, you’d see people selling off everything to get basics like food and medicine.
… and the few, the calm, would profit more than most people would in a 10 year bull.
Does this change if Bitcoin was recognized as an official currency in developed countries and able to be used in stores?
Basically 1 BTC = 1 BTC. We know that there’s only 21 million in existence, so it’s a pretty good buffer against hyperinflation if you look at it in satoshis
thats the genious about it! Its limited!
It’s just a store of value, really. Like how Gold, stocks, properties, etc. could act as hedge against weak fiat.
True, I get that. The context of this question is that I am trying to write a paper concerning Bitcoin and I’m searching for some sort of macroeconomic correlation or implications of Bitcoin’s growth or volatility, whether it potentially could be effective against inflation or even just figuring out what is the opportunity cost or effect of trillions of dollars being siphoned into the crypto market where it otherwise would have gone somewhere else. I’m definitely looking hard for some kind of effect or find out what is suffering at the expense of bitcoin, but the more I dive into aspects of Bitcoin the less I come out with in terms of what it is doing to the global economy or any macroeconomic factor. Sort of need help in finding out where to look
I don’t get how BTC is a hedge against inflation if it can dip -25% just in one day and if global crisis happens, it’ll sure dip much more than that.
Because it hasnt been used as a store of value for all of recorded human history and is far more complicated to explain than a gold coin. As market cap, acceptance, and general understanding of crypto increases, the volatility will decrease.
All fiat trends to 0 against hard assets. This has been true for all fiat currencies in history and will be true for the US dollar against bitcoin. Bitcoin has the best chance of protecting your purchasing power due to it being the first provably scarce asset in the world.
Yeah gold is viewed as scarce, but we develop new technolgies all the time to mine gold in places once thought impossible to access and places it wasnt even known to exist. We really have no idea how much gold could actually be on the planet, so bitcoin>gold in my opinion as an inflation hedge.
People always have and always will sell it for fiat in a crisis! They consider btc an asset so they want it to increase their fiat so they have more of it to spend!
BTC is still magic internet coins for becoming rich for most of the people, whenever crisis hits.. It drains because people still don’t trust it.
True, but if it is adopted does that not somewhat legitimize it’s value as an inflation hedge? However, I guess the prices of things would still be significantly higher, regardless if you pay in bitcoin or not. I guess the issue when comparing Gold to Bitcoin is that Gold itself has historic relevance and is in itself visually appealing in that sense that those who discovered it or came across it would have a natural instinct of its value. Creating an intrinsic value of Bitcoin becomes difficult. I’m not really sure what is going to protect the value of Bitcoin once it is all mined because in any case it will simply just be a digital asset that no longer has the same potential for rapid appreciation unless it is accepted as currency in many places or have significant systems built around or based on it.
I say yes, or no. Don’t know
Bitcoin Pros & Cons – Participate in the r/CC Cointest to potentially win moons. Prize allocations: 1st – 300, 2nd – 150, 3rd – 75.
Sort comments as controversial first by clicking here. Doesn’t work on mobile.
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.
Well… traditionally btc i’s a hedge against inflation. So why would you use it and sell it? Unless desperate for currency that is widely accepted i.e mortgage, bank etc.
12 decades left, final one is estimated to be mined in February 2140, just FYI.
At current technological limits. Quantum computing will likely speed that timeline up quite a bit.