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.

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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.

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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.

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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.

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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.

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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).

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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.