Speaking with CNBC’s Brian Sulivan, she discussed the confusion in the market around Bitcoin being a hedge against inflation in comparison to gold which has recently reached a five-month high in response to inflation. The head of market insights stated:
Bitcoin following Gold
In addition, Acheson went on to say that Bitcoin has not been tested as an inflationary asset because it has not been around long enough; gold, on the other hand, has been around long enough to be tested; however, the correlation between gold and inflation is actually quite low. With regards to this matter, she declared: Furthermore, the connection between Bitcoin and gold is also quite low; she pointed out that it has been negative since early summer and has stayed negative until the beginning of this month, which explains the market’s confusion.
Bitcoin an inflation hedge
In reply to a question about why Bitcoin surged while no one was talking about inflation for years and why Bitcoin sank when inflation began to take off in the spring, Acheson responded: In comparison to gold, she added:
Bitcoin outperforming gold
With major central banks printing $25 trillion since the 2008 global financial crisis, and some of the highest levels of inflation in more than 30 years being recorded, investors are turning to gold, stocks, and cryptocurrencies, among other forms of stores of value, as a means of protecting themselves from inflation. However, investors may be leaning away from traditional hedges against inflation as there were significant withdrawals from gold ETFs in October. Furthermore, investors’ lack of interest in the most popular US gold ETFs have fallen by 7% in 2021, with the emergence of alternative investment vehicles, such as Bitcoin, perhaps having an effect. On this note, prominent crypto trading analyst Plan B highlighted on Twitter: “Forget USD and QE: #bitcoin = 37 ounces of Gold.” Illustrating how Bitcoin’s value in gold ounces has increased steadily since 2010. Indeed, Bitcoin has gradually emerged as a viable substitute to gold as a store of wealth in 2021, with its price skyrocketing. This year, Bitcoin ROI has surpassed most commodities, stocks, currencies, and indices. Related video: Acheson: The market is struggling to come to terms with what Bitcoin is [coinbase]
