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The volatile journey of Bitcoin (BTC) began in 2009, and its price fluctuations have been both dramatic and influential in the financial landscape. Yet, its long-term trajectory has been in an uptrend. It pioneered the cryptocurrency boom, although it took some time before the public took notice.
Nonetheless, cryptocurrencies, particularly BTC, have been the most exciting financial instruments over the past decade. It has created millionaires, given its steep rise since it started circulating in the market. Many traders have done fine by holding BTC, as their view remained bullish.
In 2021, the value of a single Bitcoin broke $60,000. And the total market value of the crypto market reached an astounding $2.5 trillion. Before the year ended, BTC set an all-time high of $68,789.
Despite this, it has still been dogged by periods where its price has fallen precipitously. The 2017-2018 boom and crash is a perfect example. The most recent plunge occurred in March 2022 amid concerns about interest rate hikes and lower financial market liquidity.
Given these dynamics, anyone may infer that market sentiments have driven BTC. It’s no surprise speculators have rushed into and left the trading space to take advantage of the anticipated price increase or depreciation.
It has yet to fulfill its promise to create a decentralized financial system, which has captured the world’s attention. Its price does not seem to have traction as buyers and sellers push its value upward or downward, depending on the news and speculation.
But amid all these, BTC has remained the leading cryptocurrency. It remains a giant with its $2.02 trillion market capitalization. And now, prices of cryptocurrencies, especially BTC, have rebounded after over a year of lethargy.
It may be an excellent opportunity to trade as it keeps appreciating despite recession woes. Hence, it is important to know whether or not investors may use Bitcoin as a solid hedge against inflation.
Arguments Against Bitcoin as an Inflation Hedge
Bitcoin has been circulating in the market for more than a decade. Today, many investors treat it as an investment to hedge inflation. Yet, many people remain skeptical about its legality, security, and, most significantly, volatility. These are some arguments for why Bitcoin…
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