Bitcoin's Potential as an Inflation Hedge: A Closer Look
AI Summary1 min read
TL;DR
Bitcoin's capped supply and scarcity may make it a potential inflation hedge, but its short track record limits its reliability.
Tags
Bitcoininflation hedgecapped supplyscarcitystore of value
Bitcoin could be a winner if inflation rises due to its capped supply and increasing scarcity, making it harder to dilute. Its protocol limits total supply to 21 million coins, with over 94% already mined. Additionally, a large portion of coins are lost or inaccessible, and ownership is concentrating in slower-moving hands. This setup could lead to outsize price moves if investors seek a non-fiat store of value during inflationary periods. However, Bitcoin is not an ideal inflation hedge due to its lack of a long track record.
