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Is there anyone who genuinely purchases Bitcoin (BTC) as a safeguard against inflation? CNBC’s Andrew Sorkin remains unconvinced by this notion.
In a discussion with Pomp Investment founder Anthony Pompliano on Monday, the two engaged in a debate regarding whether BTC’s proposed function as a “risk off” asset is legitimate or simply a narrative fueled by speculators.
Bitcoin: Risk On Or Inflation Hedge?
Pompliano contended that Bitcoin holds different meanings for various individuals. “For some, it serves as a risk on asset, while for others, it acts as a hedge against inflation or a store of value,” he stated.
Historically, Bitcoin’s (BTC) price has shown a strong correlation with high-risk tech stocks and the Nasdaq, demonstrating sensitivity to current macroeconomic policies. Nevertheless, value investors often compare Bitcoin to gold – a “risk off” inflation hedge asset – due to its finite supply, functionality as currency, and incorruptible characteristics.
Pompliano asserted that Wall Street investors – who are more inclined to acquire Bitcoin through its newly popular spot ETF products – are primarily motivated by its significant growth potential.
Conversely, individuals in less stable nations may seek to utilize Bitcoin to safeguard their wealth, as the asset cannot be forcibly confiscated.
Bitcoin offers hope & protection for everyone.
The US dollar has lost 25% of its purchasing power in 4 years, while Bitcoin has appreciated over 800%.
We are witnessing the global adoption of a store of value.
Here is my complete segment on @SquawkCNBC this morning. pic.twitter.com/XvO0B4yE0o
— Pomp
(@APompliano) April 1, 2024
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Bitcoin’s Real Adoption
Sorkin expressed skepticism regarding the latter argument, drawing from his experiences in South Africa and Zimbabwe, where he inquired among locals of various economic backgrounds about their cryptocurrency purchases.
“Almost universally, they responded negatively,” the anchor noted. “Then I examined the data, and it also confirms that they are not.”
“The data does not support the notion that the hedge argument against inflation is valid,” he added. “I can’t help but wonder if it’s merely a narrative used to attract those who are speculating and hoping for an increase.”
Once more, Pompliano maintained that it varies depending on the location. Nigeria, for instance, boasts one of the highest rates of cryptocurrency ownership globally and ranks among the top three in the Chainalysis Global Crypto Adoption Index.
In fact, the country’s authorities have recently imposed fines on Binance and detained several of its executives for allegedly undermining the local currency against national competitors and Bitcoin.
“You don’t need to look solely at emerging markets to find reasons why individuals want to buy this,” Pompliano continued, asserting that Bitcoin trades in a “forward-looking” manner in accordance with rising month-over-month inflation rates.
The post Bitcoin “Inflation Hedge” Argument Is a Fairy Tale Used By Speculators: CNBC Anchor appeared first on Cryptonews.
