many investors are choosing Bitcoin (CRYPTO: BTC) over gold to hedge against inflation.
According to a JPMorgan Chase analyst note published on May 8, many investors are choosing Bitcoin (CRYPTO: BTC) over gold to hedge against inflation. Bitcoin exchange-traded funds (ETFs) have attracted inflows for three straight months in a row, while SPDR Gold Shares (NYSEMKT: GLD) and other gold ETFs still haven’t recovered from the outflows tied to the Iran conflict.
The logic is that because Bitcoin’s supply is hard-capped at 21 million coins, its halvings progressively tighten new issuance to enforce scarcity. But the asset’s recent performance tells a different story, and rumors of the “Bitcoin is digital gold” thesis being true are a bit overblown. Let’s look at the numbers.
The scoreboard doesn’t flatter Bitcoin U.S. consumer prices rose 3.8% year over year in April, driven by rising energy costs caused by the war with Iran. That’s the kind of environment where an inflation-proof investment earns its keep, and, at least so far, Bitcoin has not earned it. The coin is down 24% from a year ago.