Opinion: Jupiter Zheng, partner Liquid Fund at Hashkey Capital
Whenever Bitcoin has value, the narrative is always the same: it fails as inflation protection. In the eyes of critics, Bitcoin is not “digital gold” that so many others say.
With gold, who achieve the ups of all time, these critics have become louder. If Bitcoin is an inflation protection, they ask why it is also not accumulating because investors are looking for security?
Even in today’s high inflation, the Cardinal Truth: Bitcoin is an inflation protection-probably the most critical for long-term capital protection that the world has seen.
Strength in deficiency
Bitcoin has a difficult hat of 21 million coins, with full circulation expected until 2140. This built -in deficiency reflects gold, which historically served as an inflationary hedge. Bitcoin exceeded gold in many periods, such as the Covid-19 era, when global markets were flooded with liquidity.
Like gold, Bitcoin acts as an inflation protection in a long -term perspective, not low -term. Critics focus too much on low -term variability and ignore wider trends. Bitcoin was consistently used as a magazine of value in longer money printing periods.
Bitcoin is not controlled by any central bank or politician. It is a decentralized peer-to-peer system ruled by mathematics and consensus-not by electoral cycles or political pressure. In places such as Zimbabwe or Venezuela, where the governments destroyed their currencies, Bitcoin offered a more stable alternative. When faith in conventional systems weakens, Bitcoin often strengthens.
The consensus beats the centralization
The value of Bitcoin is not only at its price – it is in its project. Countries such as the USA, EU, ZAA, Singapore and Hong Kong have advanced Bitcoin regulations, but its significance goes far beyond the economy.
Inflation is an inconvenience in richer countries – growing bills for consumption and more steep eggs. In fighting economies, inflation can signal a political and financial fall. Bitcoin offers an exit. This is no longer theoretical – it happens in real life.
During the Greek crisis in 2015, citizens used Bitcoin to bypass capital control. In Venezuela and Argentina, where domestic currencies lost most of their value, Bitcoin became a tool of survival. People used it to preserve wealth, access to global markets and transactions with decentralized exchanges.
Last: Bitcoin can compete with gold as an inflation security in the next decade – Adam returned
Nature without Bitcoin boundaries is crucial. It is not based on the decisions of any institution. It is protected against debt monetization, interest rate manipulation and geopolitical pressure. Bitcoin works on a consensus, not a command.
Consensus is most critical when trust in the institution is low. This immutability is a feature that investors underestimate – and may not appreciate until they need it the most.
Portability is power
Bitcoin’s resistance is also critical in developed markets – especially in the case of failures of conventional systems. Banks may fall. Stock market markets can be disappointed. Payment processors can undergo offline. Bitcoin is not sleeping. It works 24/7, 365 days a year.
During the collapse of the bank from the Silicon Valley in March 2023, Bitcoin jumped 23%when investors were looking for security outside the conventional banking system. Bitcoin’s availability and independence have become its advantage.
In the bank’s failure, such as Lehman Brothers in 2008, consumers can lose access to their funds for months and even years. Bitcoin, kept in self-realization, remains under your control-how many private keys you have. No third page is needed.
Payment networks such as Visa or Swift can also become choked points – and goals for hackers who want to disturb the global payment infrastructure. Bitcoin is not subject to this bottleneck. Miners, not banks, verify it. While the embolism can tardy down transactions, scaling solutions evolve to improve speed and costs.
The digital nature of Bitcoin makes it particularly valuable during capital, inflation or crisis. It is arduous to take over, devaluate or freeze – giving people more autonomy than conventional financial systems.
More refined term: speculative security
Based on these features, bitcoin is undoubtedly a protection against inflation. Perhaps we need a better date for the central role of Bitcoin in our financial future.
A more precise term may be speculative protection-offers long-term protection thanks to deficiency, consensus and decentralization.
However, adoption and price variability are still obstacles to dethroning Golden Bitcoin as a real global inflation protection. Still, there are encouraging signs. Companies such as Strategy, Gamestop, Block and Massmutual added Bitcoin to their balances as a treasury strategy – with some estimates indicating four companies in S&P 500 after 2030. Bitcoin reserves examine more governments.
As speculative security, Bitcoin shines during inflation, currency devaluation or systemic instability. This is not a medicine. Its effectiveness depends on user education, internet access and geopolitical context. If the connectivity completely disappears – let’s say during the nuclear war – there will be greater problems than inflation.
Bitcoin is best understood as a financial rescue boat. This is not perfect. The effort requires proper operate. This is a compact measure of preparations for unknowns. But when the ship begins, you will regret that he did not have it.
Opinion: Jupiter Zheng, partner Liquid Fund at Hashkey Capital.
