What’s the major selling point for Bitcoin?
The mavens say that it’s a hedge against inflation since there will only be a limited number of the cryptocurrency mined and in circulation at the end.
This is unlike fiat currency that can be printed at the will of the central bank.
But, some analysts are challenging this digital notion.
The Wall Street Journal notes that such a hedge might keep its trading price within a relatively controlled range, like gold.
And recently, when inflation shot to 5-ish%, the price of Bitcoin dropped.
So, there doesn’t seem to be any correlation between the price and any macroeconomic trends. It’s not like people jumped into Bitcoin when the inflation news hit the street.
And another observer noted that the price of the digital currency seems more connected to Elon Musk’s Twitter feed and social media than anything that’s happening in the financial markets.
That tends towards speculative trading without any reason other than a hope that the price will rise.
Source: https://jeffkoeppel.wordpress.com/2021/07/26/bitcoin-and-inflation-not-so-correlated/