When will Bitcoin become an inflation hedge? Scaramucci explained
Many investors picked up interest in Bitcoin, believing it could be a hedge against inflation. According to an analyst at DA Davidson, Chris Brendler, BTC can become a hedge because it is decentralized and not a product of a central bank. These opinions and expectations led many people to accumulate large amounts of BTC coins.
But the recent price swings and speculation in the market seem to overwhelm BTC’s underlying value. Now that inflation is wreaking havoc on economies, many investors are disappointed that Bitcoin could not act as a hedge as expected.
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But a top Bitcoin supporter, Anthony Scarramucci, the founder of SkyBridge Capital, believes that BTC has not reached the stage of hedging against inflation. According to the investment firm’s founder, Bitcoin will gain that status when BTC wallets reach 1 billion.
But to reach that level, Bitcoin needs to be adopted worldwide. Scaramucci believes that if giant institutions like BlackRock introduce products related to BTC, people will know that institutional demand for crypto is growing. As such, BTC will achieve mass adoption.
Using Bitcoin as a hedge now is not appropriate
Many investors seem disappointed that Bitcoin became even more volatile during this financial turmoil. But under one interview, Scaramucci advises against investing in BTC to preserve wealth now. According to him, BTC is not yet ripe for it unless the wallets reach 1 billion worldwide.
During his interview, Scaramucci revealed that he started his BTC investment journey when his wallet was 80 million; currently the number has grown to 300 million. He also stated that Bitcoin is still growing and needs time to fix its volatility problem and become a worthy investment option.
Recall that on June 14, Scaramucci mentioned that the crypto winter is like the DotCom bubble of the 2000s. In his remarks then, Scaramucci pointed out that the event turned companies like eBay and Amazon into market leaders in their field after surviving the bubble burst.
Therefore, the one-time White House communications director believes that the ongoing bear market trend will do the same for BTC after flushing out the pointless projects.
Coinbase CEO pointed to increasing market cap
In June, Brian Armstrong pointed out that BTC is not yet ready to serve as a hedge against inflation. According to the CEO, the total market value of BTC should increase 5 to 10 times its value before it qualifies.
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Data shows that Bitcoin market value then was 1.1 trillion dollars, but now the figure is at $408,700,229,851.23. Comparing Bitcoin to gold, which currently acts as a hedge against inflation, the former still has a long way to go. The gold market cap is at $11.557 trillion and BTC is well below that level.
Featured image from Pixabay and chart from TradingView.com
