Rising prices are grabbing headlines all over the world. Across the pond in the United States, inflation recently broke a 40-year record<\/a>. The situation is severe in Europe, with prices rising<\/a>\u00a0over\u00a05% across the Eurozone and 4.9% in the United Kingdom<\/a>.\u00a0<\/p>\n While prices rise, Bitcoin (BTC<\/a>) is flatlining at around $39,000<\/a>. It poses many questions: Is Bitcoin an effective hedge against rising prices, what role can Bitcoin play in a high inflation environment and did Bitcoiners know that inflation was coming? <\/p>\n Experts from the world of Bitcoin, finance, and even European politics responded to these questions, sharing their views with Cointelegraph about the alarming price rises in Europe. <\/p>\n From data analysts Kaiko\u2019s monthly report, the Bitcoin price marched<\/a> ahead of inflation, implying that Bitcoiners may have foreseen a rise in prices and stacked sats to hedge against inflation. <\/p>\n Danny Scott, CEO of the U.K.\u2019s leading Bitcoin exchange CoinCorner, backs this argument. He is not \u201csurprised at the inflation levels we are seeing around the world.\u201d<\/p>\n \u201cThis has been in the making for the best part of a decade and COVID just expedited it. True inflation is being brushed under the carpet to keep a positive spin on how inflation is \u2018under control.\u2019\u201d<\/p><\/blockquote>\n Another Bitcoiner, this time a member of parliament, is again \u201cnot surprised\u201d by inflation running hot. The Belgian key opinion leader, Christophe De Beukelaer, was the first European politician to take his salary in Bitcoin<\/a>.<\/p>\n He told Cointelegraph that \u201cwhen we inject trillions, as we have done, at some point you have to pay the bill.\u201d But, it doesn\u2019t just take a financial toll, \u201cpeople don\u2018t see it and don\u2018t realize it, but inflation has a major impact on their well-being.\u201d <\/p>\n Nicolas Bertrand, a Global Blockchain Business Council ambassador and financial executive hailing from Borsa Italia and the London Stock Exchange, told Cointelegraph:<\/p>\n \u00a0\u201cExpansive monetary policies are contributing to higher levels of inflation and I would not be surprised to see this situation lasting for longer than people expect.\u201d\u00a0<\/p><\/blockquote>\n For De Beukelaer, however, he reckons that \u201cat some point, we will experience a big monetary crisis.\u201d<\/p>\n With the crisis in Ukraine now compounding the problem<\/a>, what does this mean for short-term inflation levels? Dessislava Aubert, research analyst of Kaiko told Cointelegraph that \u201csurging commodities prices are likely to keep inflationary pressures strong and dampen growth due to Europe\u2018s strong economic ties to Russia.\u201d\u00a0<\/p>\n She added that the current price action<\/a> in which Bitcoin has slid from highs of $69,000 is likely due to the fact that \u201cmarkets are pricing out a rate hike from the European Central Bank this year.\u201d<\/p>\n Bitcoin as an\u00a0inflation hedge is a popular narrative in the United States<\/a>.\u00a0In Europe, the jury is out or, as De Beukelaer mentions, \u201cit\u2019s hard to say with certainty.\u201d That said, \u201csince its growth is limited and transparent, it can be expected to be an effective bulwark against inflation.\u201d<\/p>\n For Bertrand, with his wealth of expertise in legacy financial markets, the situation is clear:<\/p>\n \u201cContrary to fiat currencies other widely available investment assets and even gold, Bitcoin\u2019s value cannot be negatively impacted by the issuance of new coins. This constitutes a solid base and makes Bitcoin an interesting asset in a context of higher inflation.\u201d<\/p><\/blockquote>\n Nonetheless, there are a few caveats. There is not \u201cenough data to prove that Bitcoin is statistically a good hedge against inflation.\u201d Moreover, Bertrand shared that we are not \u201cyet there in terms of adoption to consider Bitcoin a good hedge.\u201d<\/p>\n Aubert has a similar view, explaining that \u201cBitcoin has moved in tandem with risk assets over the past few months and is unlikely to decouple in the current uncertain monetary environment.\u201d <\/p>\n In contrast, Bendik Norheim Schei, head of research at Arcane Crypto, and Scott are laser-eyed focused on the role of Bitcoin in an inflationary environment. Schei told Cointelegraph:<\/p>\n \u201cBitcoin is a great option for those who want to bet on inflation running crazy. Or, rather, hedge against that scenario. A scarce asset with a fixed supply is a strong alternative if global economies move into extreme inflation levels.\u201d<\/p><\/blockquote>\n For Scott, \u201cBitcoin solves the problem of separating money from the state but comes with many other benefits such as a hedge against inflation in a decentralized and global manner.\u201d <\/p>\n Given that in some large emerging countries like Argentina \u201cpass 50% inflation, people look for solutions \u2014 Bitcoin being one of them.\u201d In a note of warning, he surmises, \u201cyou don\u2018t need Bitcoin until you do.\u201d<\/p>\n Whether Bitcoin acts as a store of value or an inflationary hedge is up for discussion, but according to De Beukelaer, the important thing is that \u201cwe have a choice.\u201d\u00a0 If a citizen\u00a0\u201cno longer has confidence in the euro, the dollar or other fiat, he can turn to Bitcoin\/crypto. And, that\u2018s positive. Power on its own always ends up doing stupid things. It is healthy that a monetary counter-power appears to balance it to cure it of its excesses.\u201d<\/p>\n Bertrand also believes that balance is key. \u201cAs always, one needs to think about their consolidated asset allocation very carefully and with the concept of balance in mind.\u201d <\/p>\n However, with \u201cpurchasing power being eroded by half over 10 years,\u201d according to De Beuekalaer, there\u2019s an added level of pressure. In essence, if there was ever a time to get smart on Bitcoin, it\u2019s now.\u00a0<\/p>\n Scott is succinct. \u201cEducation is still massively key, not just on Bitcoin but on finance and the economy as a whole.\u201d Incidentally, Cointelegraph has put together a handy explainer on Bitcoin and inflation<\/a>.<\/p>\n Schei has the last word on the seminal cryptocurrency:<\/p>\n \u201cThis is a long-term bet on an asset that will thrive in a world where large fiat currencies become valueless because of uncontrolled money printing and extreme inflation.\u201d<\/p><\/blockquote>\n With more and more thought leaders and billionaire investors coming out in favor of Bitcoin<\/a> or claiming that fiat currency is going<\/a> to zero, it might be worth hodling onto some. <\/p>\n<\/div>\n![](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-03\/dee46d0e-8349-462b-ab0d-e16cbb6401e3.png\")
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<\/figure>\nInflation is here to stay so should you HODL Bitcoin?\u00a0<\/h3>\n
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<\/figure>\nBitcoin and an inflationary future<\/h3>\n
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