Can Cryptocurrencies Act As Hedge Against Inflation?

Inflation keeps ravaging our economies and devouring our wealth.

Money in the bank is devaluating five times faster than 2019 in Western economies since inflation is reaching 5-6% rather than ~1% we were used to for years.

However, the real inflation is probably double than the official one.

Businesses were reluctant to adopt cryptocurrency or hold crypto instead of fiat currencies, but probably this will change.

Demand for digital currencies is on the rise.

Bitcoin Cash is the best option available with low fees, instant transactions, and a growing network of acceptance.

Insecurity for the dollar and euro is increasing.

The weaker economies face the worst difficulties from rising inflation.

It is not just Venezuela or Zimbabwe today dealing with extreme inflation as we watch multiple economies falling one by one as inflation is rising, debt remains high and trust in governments is lost.

The FED strategy today involves more PR than action.

The extreme rise of inflation is the result of the irresponsible actions of the same central banks that now hope to contain it with interest rate hikes.

Bitcoin (BTC) is not the only “asset” in crypto, though, and its purpose of storing value during times of high inflation, don’t seem to align with the real-time increase of inflation.

Is BTC Relative As a Hedge to Inflation?

We may not reach hyperinflation levels, still inflation will not be controlled with just words.

USD is backed by the power of the US economy, which is lately losing ground to China.

The USD printing frenzy is not going to stop.

Crypto analysts rushed to explain a bearish BTC position concerning the SEC, however, didn't take into account the fact that rate hikes didn't matter on previous occasions.

The 2017-2018 chart for BTC certainly explains that rate increase by the FED didn’t previously correlate to BTC. Bitcoin (BTC) was rising until the end of the year mostly because of speculation, but also the expectation it would reach mass adoption as a currency.

The moment fees reached $50 and the scalability concerns from theory became practice, investors abandoned BTC. The narrative had changed, though. What we were reading about Bitcoin in the past had changed in 2017.

As with any stronghold, they always fall from within.

BTC is still the frontrunner of the market, but it has long lost its vast market dominance and will not regain it this time. Investors today don't move back to BTC from other cryptocurrencies, as it happened in 2018-2019.

Today BTC strives to sustain 40% of the market share, a share that is expected to drop more. A significant factor is the rise of innovation with smart contract networks becoming the new hot field for investors.

The value of the dollar is affecting BTC but only temporarily. Inflation reached 5-6% in September, although, BTC didn't excel on this news as many were expecting.

Once inflation reached 5% it was probably the moment most traders sold the news.

"Hedge to Inflation" was yet another narrative, since it brought BTC down once inflation started growing. The retail wasn't convinced either. There wasn't an influx of billions of newcomers in BTC, however, we watched institutions gambling without understanding the technology.

Although, there is a correlation, between inflation and BTC. Higher inflation was expected since the FED and ECB printed massively in 2020 and 2021.

This expectation of higher inflation was priced in (as a what-if case) since the beginning of 2021.

The FED is now expected to take further steps to increase rates, yet this doesn't mean an immediate bear market for crypto, either. As the chart above suggests, a FED rate increase is not suggesting BTC prices will always enter a bear market. It signals nothing else but a less extensive fiscal policy, we still can't present a case of fiat money flowing in BTC lately either.

BCH A Realistic Currency To Counter Inflation Concerns

BTC is still a market leader, but this is probably going to change soon. It is a slow process of uncovering the falsehoods of each BTC narrative and re-directing the public to the real networks that work and offer innovation.

Bitcoin Cash offers a better alternative to BTC.

It is sound money, with 21 million coins fixed supply, being mined at an inflation rate of 1.8% yearly, similar to BTC.

The main difference is Bitcoin Cash actually followed the whitepaper, scaled, and can reach mass adoption as P2P electronic cash.

It is a robust decentralized network, outperforming BTC in all metrics.

Bitcoin Cash offers an alternative to inflating and censorable fiat, with a better version of Bitcoin rather than BTC. The only reason BTC is still the market leader and Bitcoin Cash is suppressed, is the Wall Street connections.

All those that wanted Bitcoin to scale and reach mass adoption, that sold out their values for Wall Street adoption instead.

In Conclusion: What to Expect

Demand for sound digital cash will keep rising.

This adoption will not just stop at the currency features, but as we've seen it expands into a modern digital economy. Smart contracts offer today a new form of finance, and while Ethereum failed to bring this model of cutting-edge financial technology to the public, smartBCH covers the gap.

It is also the reason for the ongoing aggressive propaganda by the known competition. The anti-BCH propaganda has damaged BCH.

We witness suppression of positive Bitcoin Cash news and developments with crypto media presenting only negative events as community splits, while carefully ignoring and suppressing all the positive developments.

There wouldn't be such fierce opposition to a competitive network if it didn't have the quality to succeed.

Analyzing performance, mining PoW, decentralization levels, and developments on-chain and sidechains, Bitcoin Cash is today the number one priority.

Cover Photo by, Sean Robertson on Unsplash

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