Bitcoin was popularized by investors as a way to hedge inflation. Chris Brendler of D.A Davidson said that BTC can be used as a hedge since it is not a product from a central banking institution. This belief and expectation led to many individuals accumulating large numbers of BTC coins.
But the recent price fluctuations and speculations in the market are seemingly overpowering BTC’s underlying value. Now that inflation is causing havoc in economies, many investors are disappointed that Bitcoin couldn’t serve as a hedge as expected.
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But a top Bitcoin supporter, Anthony Scarramucci, the founder of SkyBridge Capital, believes that BTC hasn’t reached the stage of hedging against inflation. According to Scarramucci, Bitcoin will attain that status when BTC wallets reach 1 billion.
Bitcoin needs to be accepted worldwide in order for it to achieve that point. Scaramucci thinks that people will be more aware of the growing demand for cryptocurrency if large institutions like BlackRock offer products that are related to BTC. BTC is likely to be adopted widely as a result.
Not a good idea to use Bitcoin as a hedge.
Many people are disappointed by the fact that Bitcoin has become more volatile in this time of economic chaos. However, during an interview,Scaramucci recommends not investing in Bitcoin to protect wealth. He says that BTC has not matured enough to be used for this unless global wallets exceed 1 billion.
Scaramucci revealed that his BTC investments began when there were only 80 million wallets. Today, it is 300 million. Also, Scaramucci stated that Bitcoin’s growth is ongoing and it takes time to resolve the volatility issues so it can be a good investment option.
Remember that Scaramucci said that crypto winter was similar to the DotCom bubble in the 2000s on June 14. Scaramucci stated that after the bubble burst, the event made Amazon and eBay market leaders in their respective fields.
The former White House Director for Communications, believes the current bear market will continue after the elimination of meaningless projects.Source: BTCUSD chart at TradingView.com
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Brian Armstrong stated in June that BTC was not ready to be used as an inflation hedge. Before qualifying, BTC’s total market cap must increase by between 5 and 10 times.
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The data shows that there is no evidence of a decline in the Capture of Bitcoin MarketThe figure was then $1.1 trillion. But, it is now at $408,700,229,851.23. Bitcoin and Gold are two different things. The former is currently used as an inflation hedge. However, Bitcoin still has much to learn. BTC, which is far below the $11.557 trillion gold market cap, stands at $1.557 trillion.
Featured image by Pixabay, chart from TradingView.com