Data from analyst firm Chainalysis shows that Bitcoin (BTC) cannot be the inflation hedge that many believe.
“We cannot currently show a statistically significant relationship between US inflation and bitcoin prices, but we do know that many people invest in bitcoin as a hedge against inflation,” Kim Grauer, head of research at Chainalysis, told Cointelegraph. August 31st when asked what she thinks about current US inflation and its impact on Bitcoin.
US inflation has been a hot topic for the past year or two. Back in June, reports showed that inflation in the United States had reached levels not seen in over a decade.
In other countries, inflation was much worse than in the United States. Venezuela, for example, experienced inflation of 10,000,000% in 2019. And interest in digital assets grew at the same time.
“We also know that in other countries with strong currency inflation or devaluation, such as Venezuela and Nigeria, people use cryptocurrencies as a store of value,” added Grauer.
Bitcoin is often described as a store of valuable assets in the crypto industry, but logically events such as the price drop in early 2021 cast doubt on this narrative.