Many investors, despite the lack of a statistically significant association between inflation and Bitcoin values, continue to view the asset in this manner.
According to data from the blockchain analytics firm Chainalysis, Bitcoin (BTC) may not be the inflation hedge that many people perceive it to be at this time.
According to Chainalysis‘ head of research, Kim Grauer, when asked about current inflation in the United States and its impact on Bitcoin.
She responded, “Right now, we can’t show a statistically significant correlation between inflation in the US and Bitcoin prices, but we know anecdotally that many people invest in Bitcoin as a hedge against inflation,” according to Cointelegraph on August 31.
Recently, the topic of inflation in the United States has been a popular one. As recently as June, studies indicated that inflation in the United States had reached levels not seen for more than a decade.
While the United States has seen high inflation, many other countries have witnessed substantially higher inflation than we have seen here. 2019 saw a 10,000,000 percent increase in inflation in Venezuela, for instance. During the same period, interest in digital assets surged.
“We also know that people in other countries, such as Venezuela and Nigeria, who are experiencing more severe currency inflation or devaluation, use cryptocurrencies as a store of value,” Grauer continued.
Despite the fact that theoretically, occurrences such as the price fall earlier in 2021 throw that narrative into question, Bitcoin is frequently characterized as a store of value asset in the crypto business.