Crypto
Coinshares: Bitcoin & Inflation: Maturing Into A Real Asset June 21, 2021
June 2021 - Crypto
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- Producer prices, being exposed to rising commodity prices, is where inflation is beginning to rear its ugly head. At 7.1% for the developed world, this is now in the 90th percentile of historical figures.
- Wage growth was unusually high during the pandemic, distorted by lower paid workers being laid off. As these workers regain employment, over the coming months wages are more likely to fall than rise.
- Data suggests that bitcoin is beginning to fulfil this inflation hedge role. Observing bitcoin’s price changes relative to changes in inflation shows that this relationship is becoming statistically significant.
- We remain unsure as to what will happen to inflation in the coming 5 years, but we see adding real assets as a prudent measure to protect portfolios from the tail-risk that inflation runs out of control.
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