The creator of Dogecoin opposes the thesis “Crypto is a hedge against inflation”

Arman Shirinyan

The creator of the largest memecoin on the market shares his view on “crypto is a hedge against inflation”

Dogecoin creator Billy Markus shared his take on the popular belief that cryptocurrencies are a hedge against inflation. The creator of the memecoin believes that this is just “marketing” and that people mainly trade or hold cryptos due to their hyper volatile nature.

The “inflation hedge” story in the cryptocurrency market emerged a few months ago, when Bitcoin, Ethereum and other cryptocurrencies showed relatively convincing performance in the market, outperforming most traditional assets.

Such a trend of cryptocurrencies has made it a perfect store of value, with the value of fiat currencies decreasing in the background. Sentiment changed after the massive market correction we saw in May, caused by the Terra UST and LUNA disaster.


Inflation against crypto market

Despite the massive drop in value and rapidly declining value of digital assets, most of them still perform better than alternative inflation hedges like gold or commodities. Relatively speaking, your investment in Bitcoin 10 years ago would have earned you thousands of percent in profit, easily beating gold and other inflation hedging tools.

Unfortunately, the majority of crypto holders in the market discovered digital assets after or during the big bullruns of 2017 and 2021. If you had invested in Bitcoin during the “inflation hedge” period, you would be down more than 30% compared to your initial investment. , making Bitcoin or other cryptocurrencies one of the worst ways to defend against inflation.

The Dogecoin co-founder’s view on the nature of the crypto market is generally truthful, as most competitive investors don’t view crypto as an inflation hedge and use it as a tool for exposure to volatility.

Source link