The Magazine for Asian Investors
The inflation figures have shaken up the investment world this week. CPI has risen to 6.2% YoY in the month of October, which is now worrying even the top thinkers. The Fed vice-chairman stated last week that high inflation next year would be a sign of policy failure.
However, anyone who has recently gone to the supermarket or gas station could see without a second thought that prices have risen significantly.
With the inflation figures, probably a kind of panic has broken out whereby the price of precious metals and also the U.S. dollar have risen. Both are seen as safe-haven assets.
For a long time, Bitcoin, which is also called digital gold, was also seen as an inflation hedge. But the Bitcoin price had to accept losses after the inflation figures were published?
Is Bitcoin done?
Certainly not, and there is no reason to panic. Bitcoin has impressively beaten inflation over the last 10 years. The current price drop may happen after a recent all-time high. In addition, more and more Bitcoin is moving away from crypto exchanges and into private wallets. This could mean that investors want to bring their Bitcoin investment to safety.
Now, one can certainly cite the recently published inflation figures as a reason for this, but it cannot be 100% proven.
Bitcoin investors who are convinced of their investment should see the price drop with joy because they could buy Bitcoin for a lower price.
For investors in general if you are convinced of an investment and have done your homework then you should take the chance to buy more for less money. On the other hand, if the price goes down in an asset you like and then you don’t like it anymore then you should think about how well you know the asset and why you invested. Luck is not an investment strategy and the markets are not made to calm the nerves of investors.
Bitcoin is still an interesting investment and Bitcoin investors appreciate Bitcoin not because of the price but because of the features of the ecosystem such as decentralization and freedom.