Here’s how many wallets are needed for Bitcoin to be an inflation hedge

One of bitcoin’s main selling points has been the fact that its returns have often put it ahead of the rate of inflation. Because of this, it has become known as the “digital gold” as a good part of society argued that the digital asset is a better hedge against inflation than any asset. However, not every bitcoin fan believes that bitcoin is an inflation hedge, at least not yet. One of them is the CEO of Skybridge Capital, Anthony Scaramucci. Here’s what he means.

More wallets are needed

Now, bitcoin has grown tremendously since it was launched over a decade ago. That is why it is impressive that the digital resource is compared to counterparts that have existed much longer. One of these is gold, which in the past has proven to be the inflation hedge of choice for investors.

However, with BTC’s growing popularity, it has been able to register as a potential inflation hedge. But despite so many believing that the digital asset qualifies as a good inflation hedge, Anthony Scaramucci doesn’t think so and it mainly comes down to the adoption of the cryptocurrency,

Scaramucci explained during an interview with CNBC’s Squawk Box that while bitcoin has the potential to be an inflation hedge, it is nowhere near being one. According to the CEO, it’s because the number of BTC wallets is still lower than 1 billion.

BTC price trading at $21,414 | Source: BTCUSD on TradingView.com

Currently, there are around 300 million bitcoin wallets, but Scaramucci says that until BTC wallets are over the 1 billion mark, they cannot be considered an inflation hedge.

Bitcoin is still too immature

Having only been around for 13 years at this point, bitcoin is still arguably a very young asset. Add that it is a digital asset, and the cryptocurrency takes on another layer of uncertainty around it. And this immaturity is one thing Scaramucci points to.

He explained that one thing that goes against BTC being an inflation hedge is its immaturity as a technical asset. However, this does not completely negate the cryptocurrency when it comes to its potential.

The limited supply of bitcoin has been a big draw for investors, and even Scaramucci has pointed to this as one of the main arguments for BTC, which he believes, given enough time, will come to compete and even beat gold, which is thousands of years old, mainly because bitcoin can be easily moved and easily stored.

Currently, it is said that less than 5% of the world’s population has bitcoin. The CEO of ARK Invest previously said that if 5% of institutional money were to move into bitcoin, the digital asset would likely reach as high as $500,000.

Featured image from ETF Stream, chart from TradingView.com

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