How Bitcoin price and inflation are co-related

There are various reasons for people to invest in cryptocurrencies. While some people desire to book profits, others see this as a quick method to increase their wealth. Others, on the other hand, consider it as a store of worth. However, the majority of them would agree that cryptocurrency, particularly Bitcoin, is an excellent inflation hedge. That is, when inflation grows, the value of money falls.

Also Read | Fancy investing in Squid Game cryptocurrency? Here’s all you need to know

To combat this reoccurring issue, many people invest in assets that are likely to appreciate faster than inflation. This technique guarantees that the net worth of their investment stays positive despite the fact that inflation eats away at the value of their savings.

Also Read| Twitter Ceo Jack Dorsey says ‘hyperinflation’ will hit US and world soon

Bitcoin’s remarkable increase over the last few years has led investors to believe that it has the ability to outperform inflation. As a result, rather than investing in gold or real estate, many of them are investing in the cryptocurrency sector.

Also Read| Bitcoin crosses $66,000 mark as mainstreaming cryptocurrency gains momentum

According to JPMorgan, Bitcoin, the world’s largest cryptocurrency, is replacing gold as a hedge against inflation, propelling the recent run. The debut of the Bitcoin Strategy ETF, which became the fastest ETF to reach $1 billion in assets under management (AUM), has sparked interest in the cryptocurrency community. It has also focused attention on Gold ETFs and their six-month downward spiral.

Also Read| Blockchain attraction: Five Indian celebrities in the NFT game

In a recent note sent to investors, JP Morgan said many investors are choosing Bitcoin over gold as a hedge against inflation. “The re-emergence of inflation concerns among investors has renewed interest in the usage of bitcoin as an inflation hedge,” the note said.

Also Read| US announces ‘Cryptocurrency Enforcement Team’ to tackle cyberattacks

During this time, investment in gold ETFs have dropped by more than $40.8 billion. Furthermore, the yearly return on investment for some of the best-performing gold ETFs has fallen by up to 6%. (ATI).

Also Read| Crypto transactions surge 641% as DeFi dominates Indian market, says report

For much of last year, consumer price inflation in India remained higher than the Reserve Bank of India’s objective of 4%. With global crude oil prices rising, many people are anxious that inflation may climb more in the short term.