When horrific inflation figures in the United States fell this month, bitcoin was flagged as a possible hedge, but it looks increasingly unlikely.
Speculation that bitcoin would be used by investors as a hedge instead of gold seems unlikely despite the horror of US inflation.
The price of bitcoin has been trending down this week from a high of $ 62,440 (A $ 86,398) last Tuesday to $ 55,783 (A 77,187) yesterday.
The crypto recovered some ground today, hitting US $ 56,795 (A $ 78,587).
When the shocking October US inflation figures erupted on November 11 – a 6.2% increase in the cost of living – cryptos surged.
Bitcoin briefly crossed the $ 69,000 (A $ 95,000) mark. Since then, bitcoin has plunged almost 20%.
This means that the inflation hedging story “should come with some very big caveats,” UBS currency strategist James Malcolm said. Business intern. “It’s not a robust way of thinking about it.”
Bitcoin’s weakness has also been attributed to the strengthening of the US dollar.
Despite the massive sell-off, some of the money could shift from bitcoin to smaller altcoins.
“Despite some turbulence, this is still technically a bull market,” said Mati Greenspan, CEO of Quantum Economics. Bloomberg.
“So the money from the large cap coins can easily end up in some of the smaller ones. ”
Zcash is available for the week, as is Avalanche.
Bitcoin is also up 212 percent for the year and 7,546 percent over the past five years.
The global crypto market cap is US $ 2.46 trillion (AU $ 3.4 trillion). Bitcoin alone is valued at US $ 1,075 billion (A $ 1.49 billion).
Hillary Clinton warns bitcoin ‘undermines the dollar’
However, former US Secretary of State Hillary Clinton recently issued a bitcoin warning at the Bloomberg New Economy Forum in Singapore.
She warned that the crypto could “undermine the dollar”.
“What looks like a very interesting and somewhat exotic effort to literally mine new coins in order to trade with them has the potential to undermine currencies, undermine the dollar’s role as a reserve currency, destabilize nations, maybe starting with the small ones, but going a lot bigger, ”she said, Forbes reported.
She said nation states need to start paying “more attention to … the rise of cryptocurrency.”
ASIC warns crypto investors are ‘alone’
Australian Securities and Investments Commission (ASIC) Chairman Joe Longo also warned people this week against investing in crypto.
He said consumers were “alone” due to limited regulatory protections.
The implications for consumers are potentially huge, ”he said, the Sydney Morning Herald reported.
“It’s almost an article of faith that no one should invest in something they don’t understand.
“Who among us can say we really understand cryptoassets and cryptocurrencies? Mr. Longo told the Financial review great summit and wealth.
He said investors should view crypto with great caution, citing the maxim “Don’t put all your eggs in one basket.”