Dear Readers,
It has been a rough few months for financial markets. Inflation in the United States and around the world has been significantly higher than usual, and that trend is accelerating as time goes on. Couple that with actions being taken by the Central Bank in charge of the world’s reserve currency, the Fed, which is attempting to combat rising inflation by hiking the base interest rate on which a significant portion of the world economy operates. The result? Stocks are down, real estate markets are cooling, crypto assets are tanking, and Bitcoin is struggling to regain its bull market.
But wait…isn’t Bitcoin supposed to be the quintessential inflation hedge? Isn’t Bitcoin’s hard cap of 21 million coins supposed to push its exchange rate against weak fiat currencies ever upwards?
Bitcoin maximalists like me have been preaching about Bitcoin’s resistance to inflation for quite some time. So why is Bitcoin not outperforming during this period of extreme inflationary pressures? Why is Bitcoin seemingly following the same trends as the rest of the market?
The answer is that there’s more to it than meets the eye.
