If some of you guys are buying into some of the latest media FUD or know someone who is, here is a thought process that might help:
Recently the media has been saying that because of how far bitcoin is falling, it’s a highly risky investment and not a good hedge against inflation.
If you look purely at the numbers, that argument is flawed.
If you have 1000$ and assume an inflation rate of 10%, in order to retain the same purchasing power you need to gain 11.11%.
If we look at the numbers on bitcoin since 2017, it’s gone from 1.7k all the way to around 30k. That’s about a 1700% return in 5 years or 333% annually.
Therefore, if you had invested in bitcoin at the time, In order to successfully hedge against 10% inflation on your 1000$ account, you would only have needed to have invested around 33$ (calculation was done without compounding inflation). If you invested that amount at ATH you would only be down $17.
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