Data Does Not Currently Show Bitcoin As A Hedge Against Inflation, Chainalysis Says

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Data from blockchain analytics firm Chainalysis suggests that Bitcoin (BTC) may not be the inflation hedge that many seem to believe.

“At this time, we cannot show a statistically significant correlation between inflation in the United States and Bitcoin prices, but we know anecdotally that many people invest in Bitcoin as a hedge against inflation,” Chainalysis research manager Kim Grauer told TBEN. on August 31, when asked what she thought of current inflation in the United States and its impact on Bitcoin.

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US inflation has been a hot topic for the past two years. In June, reports showed inflation in the United States was reaching levels not seen in more than a decade.

Other countries have experienced much worse inflation than the numbers seen in the United States. Venezuela, for example, experienced 10,000,000% inflation in 2019. Interest in digital assets has grown at the same time.

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“We also know that in other countries that are suffering from more severe inflation or currency devaluation like Venezuela and Nigeria, people are using cryptocurrencies as a store of value,” Grauer added.

Bitcoin is often portrayed as a store of value asset in the crypto industry, although events such as the price drop earlier in 2021 logically call this narrative into question.

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