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#1032 Zach Weinberg & Logan Bartlett Debating Pomp On Bitcoin’s Utility

The Pomp Podcast

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Bitcoin as a Money Supply Hedge

  • People often mistakenly believe Bitcoin is a hedge against CPI inflation (consumer price increases).
  • In reality, Bitcoin is inversely correlated with CPI and seems to be correlated with money supply growth.
  • When the Fed tightens monetary policy (reducing money supply), Bitcoin and other risk assets tend to decline.
  • This suggests Bitcoin acts as a leveraged beta on money supply growth, meaning its price increases when the money supply expands, especially in speculative markets.
  • Therefore, "inflation hedge" in the context of Bitcoin actually refers to a hedge against money supply expansion, not consumer price inflation.
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