Crypto billionaire and Binance founder, Changpeng CZ Zhao, has suggested cryptocurrency as a way to fight inflation. Billionaire Michael Saylor concurred in his speech when he pointed to Bitcoin as the perfect inflation hedge.
Two Billionaires Propose Cryptocurrencies to Fight Inflation
In a tweet, the crypto billionaire asserted that inflation is an unstoppable opponent. However, one does not need to fight against inflation when it comes to cryptocurrencies.
You can’t beat inflation. But you won’t have to fight it when you only have crypto. CZ said.
The assertion caught the attention of the founder of MicroStrategy – the largest institutional investor in Bitcoin, Michael Saylor. Saylor claims that one only has to use Bitcoin to not be affected by inflation
Put your Bitcoins out to sea and let the winds of inflation carry you, Michael Saylor commented.
The speech of two crypto billionaires has been backed by recently published inflation statistics in the US According to data from the Bureau of Labor Statistics, inflation in the US in December reached the highest level for 39 years. The data showed that in the same period last year, prices of consumer goods rose 7% in December. The increase was mainly driven by increases in the cost of energy, housing and used cars. and food.
The 7% increase marked the fastest year-on-year increase in US inflation since 1982. December, while a new recent high in inflation, was not the only month with alarming inflation figures. . The inflation rate surpassed 5% for eight consecutive months last year, and is expected to continue rising into 2022.
The Federal Reserve has responded to the growing rate of inflation, although it has only recently stopped describing the situation as temporary. During a recent appearance before Congress, Fed Chairman Jerome Powell announced that the central bank would raise interest rates to combat inflation. Powell warned that the Fed could make up to three rate hikes by 2022 if it deems necessary.
If we see inflation stay high for longer than expected [and] we have to raise interest rates more and more over time, we will, Powell said.
The Fed first revealed its plan to raise interest rates in the minutes of its meeting held in December. The document caused some turmoil in the crypto market and was considered one of the reasons for the upswing. the recent crypto market crash. Since the minutes of the meeting were published, Bitcoin has dropped from $46,000 to $43,000.
Is Bitcoin a Reliable Inflation Hedge?
The Bitcoin price volatility that accompanied the Fed announcement has led some traditional market observers to question whether Bitcoin is a reliable hedge against inflation.
However, Bitcoin advocates like Michael Saylor, Bill Miller, and Ray Dalio, no doubt store the valuable properties of Bitcoin as they have embodied in their investment strategy. Despite the short-term volatility, Bitcoin has performed impressively in the long-term. This is why more institutional investors, high net worth individuals, and even retail traders have been showing a greater preference for Bitcoin over fiat currency.