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Is Bitcoin a Hedge Against Inflation? 

It has been much debated whether Bitcoin is a global inflation hedge, and some proponents argue that it has the potential to protect against inflation and currency devaluation. However, like any investment, there are risks and potential drawbacks to consider and while we cannot give financial advice on this matter, it's an interesting discussion.

The first argument in favor of Bitcoin as a global inflation hedge is that it has a finite supply, with a maximum limit of 21 million coins that can be mined. This is in contrast to gold that has an unkown supply, and fiat currencies, which can be printed in unlimited quantities by central banks, potentially leading to inflation.

An additional factor is that Bitcoin is decentralized and operates on a blockchain network, which means it is not subject to government or central bank control. This can provide a measure of protection against political instability or economic turmoil that could impact traditional investments and a run on banks.

However, there are also several potential drawbacks to consider when it comes to Bitcoin as an inflation hedge. One is its volatility: the price of Bitcoin has been known to fluctuate wildly, sometimes within a matter of hours or days. This can make it difficult to predict how the asset will perform in the short term. On the flip side, Bitcoin has proven recently to be more stable, despite mainstream media and regulatory FUD, even when compared to stocks. 

Another potential issue is that Bitcoin is that despite emerging in January 2009, it is still seen as a relatively new and untested asset class. While it has shown strong performance in recent years, there is no guarantee that it will continue to do so in the future.

 

Additionally, Governments are still questioning how cryptocurrencies can classed as assets, and how they can and / or should regulate or restrict their use. In parallel Governments are talking about launching their own currencies called CBDC's (Central Bank Digitial Currencies), with some countries already testing them with mixed results, moral dilemmas and some opposition. 

 

Overall, while some investors may view Bitcoin as a global inflation hedge, it is important to consider the potential risks and drawbacks before making any investment decisions.

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