One of the major attractions and talking points for converting a crypto non-believer to a believer was its perceived ability to be a great hedge against inflation. That belief is not shattered.
The underpinning argument was that bitcoins being a currency in limited supply amidst rising demand, it has the characteristics required to be inflation-proof. Crypto enthusiasts also point to the fact that the currency is decentralized without any central bank manipulation or control as a major factor that makes it different from fiat currency such as the US dollar.
These beliefs and the foundations for which they have come to be appreciated have come crashing down in recent weeks as the inflation rate gallops to records not seen in over a decade. The cascading effect is a cryptocurrency crash that has seen the flagship blockchain-built bitcoin lose almost 60% in value year to date. As we place this article for publishing Bitcoin is struggling to hold at $20k. This begs the question, why are bitcoin prices crashing when they should be holding firm during inflation?
