The delusion of inflation being transitory has been debunked by financial experts. Investors are realizing they have to hedge against it. The inflation rate continues to rise alarmingly. Top investors are supporting the use of bitcoin for investment protection. They think it is better than gold in getting protection from inflation. In recent years, it has proved a better protector of wealth in the long run.
Return of Institutional Investors to Bitcoin
These investors now see bitcoin better than gold in hedging against inflation. US policymakers have hinted they are unlikely to ban crypto the way China has done it. There are contrasting opinions among major investors about using bitcoin as a hedge against inflationary trends. Some established investors have a different opinion and do not think cryptocurrency is a better hedge. They do not find it a guaranteed investment protector. Some bank reports on this subject say it is not better than commodities or even equities for hedging against inflation.
Can Ethereum Be Used?
The transaction protocol of ethereum was upgraded recently. This change has brought down its transaction fees and allowed the issuance of its tokens at lower rates. It is expected to become a deflationary currency because the ethereum amount being burned is more than new token creation. Because of this, experts say ethereum can be a better and long-lasting hedge against inflation than bitcoin. The goal of the new ethereum upgrade is to bring down the gas fees and not to make it scarce. The idea is to allow easier and faster network access. The advantage ethereum has over bitcoin is because of its other applications. As bitcoin has recently lost some of its sheens, ethereum with its improved underlying technology can outperform it.
Inflation is rising across the world and this is driving up investments in crypto. On the other hand, gold which used to serve as the main hedge against inflation is no longer fulfilling that expectation.