Chainalysis, a blockchain analytics company, suggests that Bitcoin (BTC), may not be as effective an inflation hedge as many believe.
“Right now we can’t prove a statistically significant correlation among inflation in the US prices and Bitcoin prices,” Chainalysis’ head for research Kim Grauer told Cointelegraph Aug. 31 when she was asked her thoughts about current inflation in America and its impact on Bitcoin.
Over the past year, U.S. inflation has been a topic of great interest. Reports from June showed that the U.S. had experienced an inflation rate unprecedented in more than a decade.
Inflation in other countries is much worse than the one experienced by the United States. Venezuela was the worst affected country with inflation, at 10,000,000% in 2019. Interest in digital assets grew in tandem.
Grauer said, “We also know that people use cryptocurrencies to store value in countries like Venezuela or Nigeria that are subject to severe currency inflation and devaluation.”
Bitcoin is often referred to as a store-of-value asset in crypto industry, even though events such as the 2021 price crash call into question that narrative.