A blockchain researcher is issuing a warning to Bitcoin investors who believe that BTC is a solid hedge against inflation.
Lucas Outumuro, head of research at the blockchain intelligence firm IntoTheBlock, is questioning the thesis that BTC is a hedge against inflation due to its finite supply of 21 million BTC.
In a recent newsletter, he points out that Bitcoin’s latest price stumbles have coincided with skyrocketing inflation numbers.
“As signs of increasing inflation became apparent, many recognized investors such as Paul Tudor Jones saw Bitcoin as a hedge.
Bitcoin’s recent lackluster performance may be beginning to diminish institutional investors’ hopes of it acting as an inflation hedge.”
Outumuro also notes on Twitter that Bitcoin’s price initially climbed but then dropped after the Consumer Price Index (CPI) released high inflation numbers on Friday morning.
“Bitcoin is following the S&P 500 step by step today
After the release of the high CPI inflation numbers at 8:30 am, BTC climbed 2% but proceeded to drop as markets opened
Not looking great for the inflation hedge thesis…”
Bitcoin is trading at $48,172.97 at time of writing and is down more than 9% from where it was priced a week ago.
But not all of BTC’s metrics look bearish, according to Outumuro. Bitcoin’s weekly outflow off exchanges reached a five-month high, with nearly $3 billion in BTC exiting centralized exchanges in the past week, according to the researcher. Exchange outflows can be a bullish indicator as the metric suggests that BTC investors intend to hold on to their crypto assets.
Read Outumuro’s full newsletter here.
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