Is Bitcoin really a hedge against inflation?

Published at: Aug. 16, 2022

While Bitcoin (BTC) has failed in countering this year's rampant global inflation, it should still be considered as an inflation hedge, says Steven Lubka, the managing director of private consumers at Swan Bitcoin. 

According to Lubka, Bitcoin works well as a hedge against rising prices when inflation is caused by monetary expansion. It is less effective when inflation is caused by supply disruption of food and energy, which he sees as the leading cause of this year's rampant inflation. 

"In a world where the price of goods is going up because there's been a radical loss of abundance, Bitcoin isn't going to protect investors from that," Lubka said. 

He also points out that Bitcoin is a better hedge against inflation than stocks or real estate since it doesn't need maintenance, nor is it affected by the risk involved in stock-picking. 

"Bitcoin has none of those risks that I just identified as stocks or housing have. It's a pure store of value," he explained. 

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