Bitcoin doesn’t consistently act as a hedge against inflation, but it has instead “evolved into a liquidity barometer,” says NYDIG’s Greg Cipolaro.
Inflation does not have a major impact on Bitcoin’s price, as many believe, but a weakening US dollar does help push up the cryptocurrency alongside gold, according to NYDIG.
“The community likes to pitch Bitcoin as an inflation hedge, but unfortunately, here, the data is just not strongly supportive of that argument,” NYDIG global head of research Greg Cipolaro said in a note on Friday.
“The correlations with inflationary measures are neither consistent nor are they extremely high,” he added. Cipolaro said that expectations of inflation are a “better indicator” for Bitcoin (BTC) but are still not closely correlated.
