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.
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.
“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.