Bitcoin is continuously making rapid progress in the U.S. Inflation has been smashing the historical high one after another this quarter. For example, the prime cryptocurrency broke its previous record of $68,500 by striking the $69K. Further, institutional investment has played a big role in this rally as big-money moves continuously trickle in the BTC network.
Moreover, the head of research at IntoTheBlock, Lucas Outumuro, believes that this price surge is increased because Bitcoin is presented itself as an inflation hedge. Further, he said:
“The thesis that Bitcoin is an Inflation Hedge is fueling. Also, BTC hit a new peak around $69K reaching the highest inflation of the U.S in the last 30 years”.
Although the question is still there, why has the drive for inflation hedge gone a notch higher? In Covid-19 in early 2020, the economic crisis across the globe appeared due to massive layoffs travel restrictions and social distancing became effective.
Consequently, the U.S government accepted initiatives like printing more money to warn its citizens against the economic crisis. Further, the American administration printed more than $6 million for this purpose.
The ripple effect of this decision involved high inflation rates formulated on factors such as the US Dollar Index (DXY) sliding into a 32 month low in December 2020. That’s why Bitcoin emerged as a leading alternative to fill the void as a hedge against inflation. For instance, Bitcoin has increased by more than 1715%, from lows of $3,800 set down in March 2020 to highs of $69,000 achieved lately.
