Friday, 18 September 2020 11:28

The Case that Bitcoin is Ultimately the Only Long-Term Protection Against Inflation


Gold and oil have historically been reliable stores of value. Because they are scarce commodities, they make dependable hedges to the inflation of fiat currencies. As a result, they have commanded price premiums above and beyond the demand for their consumption alone.

For the last 75 years, the U.S. dollar has also been a reliable store of value. This is a result of its comparatively good management by the Federal Reserve and the strength, resilience, and reputation of the U.S. economy. In fact, it is the most widely held fiat currency in the world and recognized as the global reserve currency, denominating and settling the majority of international trade.

With that said, we believe there are fundamental problems with gold, oil, and the U.S. dollar as stores of value going forward. Below, we will make the case that bitcoin [1,2,3] is ultimately the only long-term protection against inflation.