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Bitcoin: Risk On or Inflation Hedge?
According to CNBC’s Andrew Sorkin, investors aren’t buying Bitcoin (BTC) as an inflation hedge. During an interview with Pomp Investment founder Anthony Pompliano, both debated whether BTC’s theoretical role as a “risk off” asset is a real thing or a mere narrative driven by speculators.
Pompliano’s Perspective
Pompliano argued that Bitcoin can mean different things to different people. He mentioned that for some, it’s a risk-on asset, while for others, it serves as a hedge against inflation or a store of value.
Bitcoin’s Correlation and Value
Historically, the price of Bitcoin (BTC) has correlated strongly with high-risk tech stocks and the Nasdaq, showing sensitivity to macroeconomic policy. Value investors often compare Bitcoin to gold as a “risk off” inflation hedge due to its limited supply, usability as money, and unchangeable nature.
Wall Street and Global Adoption
Pompliano suggested that Wall Street investors, attracted by new spot ETF products, are likely buying Bitcoin for its growth potential. In contrast, individuals in less stable countries may see Bitcoin as a way to safeguard their wealth from seizure.
Real Adoption Insights
Sorkin shared his skepticism based on experiences in South Africa and Zimbabwe, where locals from different economic backgrounds showed little interest in crypto. However, Pompliano highlighted Nigeria’s high crypto ownership rates, ranking in the top 3 globally for adoption.
In Nigeria, authorities have taken actions against crypto exchanges like Binance, alleging destabilization of the local currency. Pompliano emphasized that Bitcoin’s appeal extends beyond emerging markets, citing its forward-looking trading behavior in response to inflation trends.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
