Inflation Is Rampant. Is It Time to Buy Bitcoin?
Inflation has hit its highest level in 13 years, according to new Consumer Price Index data released today. Year-over-year inflation hit a whopping 5.4%, well above the 2% long-term rate target the U.S. Federal Reserve sees as economically healthy.
Some bitcoin investors may take that as a buy signal: Bitcoiners have long argued the digital currency has the potential to act as a hedge against inflation in any single currency. That argument often hinges on bitcoin’s strictly limited supply, but just as important is its global nature, disconnected from any one country’s economy or currency. As bitcoin adoption grows, that case becomes stronger.
But professional investors remain seemingly unperturbed by the inflation spike, suggesting caution even if you fully buy into bitcoin’s anti-inflation thesis.
Before this morning’s report, institutions and other big wheels were in lockstep with Fed Chair Jerome Powell’s prediction that this wave of inflation is transitory. This morning’s CPI surprise doesn’t seem to have changed their minds: Bond yields remained essentially unchanged, with yield on the 10-year Treasury note actually slipping slightly to 1.35%.
