{"id":8636,"date":"2022-06-12T14:00:00","date_gmt":"2022-06-12T14:00:00","guid":{"rendered":"http:\/\/ci02a34e7fb000269e"},"modified":"2022-06-12T14:00:00","modified_gmt":"2022-06-12T14:00:00","slug":"the-dollar-is-inflating-against-bitcoin","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/markets\/the-dollar-is-inflating-against-bitcoin","title":{"rendered":"The Dollar Has Been Inflating Against Bitcoin Since 2011"},"content":{"rendered":"
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It is my fervent wish that hyperinflation never reaches our shores. The probability that we will avoid that outcome is extremely slim. Put another way, our chances of experiencing hyperinflation are extremely high; the only question is timing. When will it happen? Many hope it\u2019s a long way off. Some believe it\u2019s here already and has been for quite some time. <\/p>\n

The U.S. Dollar Is Drastically Inflating Against Real Estate<\/h2>\n

Some argue that hyperinflation<\/a> is already here in real estate. Many Americans (and other people around the globe) are feverishly overpaying for real estate that, in some areas, is causing housing prices to nearly double in just one year. I don\u2019t mean to be a buzzkill, but no, the value of your home didn\u2019t just double in a year. Your currency is rapidly inflating against a hard asset like real estate. Are there other signs? <\/p>\n

Is Bitcoin An Inflation Hedge?<\/h2>\n

There are plenty of people saying bitcoin isn\u2019t an inflation hedge. They point to last year of record amounts of inflation while the bitcoin price has remained about the same or has moved lower since November. How can that be?! Well, the only people who try to measure inflation month-by-month or a year at a time are central bankers and people who operate with high time preference. Is that you? If so, zoom out!<\/p>\n

Let\u2019s make a fair comparison of the U.S. dollar and bitcoin since the day they reached parity. Most people including Bitcoiners have no idea when that happened. Do you? A quick search reveals that on February 9, 2011, one bitcoin was equal to one dollar. Now we have a measuring stick for inflation for the past 11 years. Measuring inflation by the decade strikes me as a low time preference way of thinking. So, what do we learn?<\/p>\n

The Dollar Has Drastically Inflated Against Bitcoin<\/h2>\n

If you zoom out as I suggest, you will notice that bitcoin is now 29,000 times more valuable<\/em> than the U.S. dollar. Viewed through that lens, I think it\u2019s safe to say bitcoin is telling us a different story about inflation. It\u2019s telling us that the U.S. dollar is drastically inflating against the hardest form of money<\/a> ever invented or discovered. Anyone who tries to argue otherwise doesn\u2019t understand money, the banking system or our financial system. Oh wait, that\u2019s pretty much all of us.<\/p>\n

I take no comfort in pointing this out, but I roll my eyes at the morons in government, the press, Wall Street, Silicon Valley and yes, even die-hard Bitcoiners who view inflation through the wrong lens. If your unit of account<\/a> is the U.S. dollar and<\/em> you view bitcoin as an investment then your framing is plausible, if misguided. Maybe I\u2019m the one who is delusional, but I think the experiment of a decentralized form of money that governments, corporations and billionaires can\u2019t devalue has been working very nicely since 2009, and I\u2019m sure more people will discover the blinding flash of the obvious this year, and for many years to come. <\/p>\n

To all those Bitcoiners who believe they operate with low time preference and<\/em> wonder why bitcoin hasn\u2019t moved in lockstep with reported inflation numbers, check your financial blind spot: You\u2019re using the wrong unit of account. You suffer from fiat disease. If your unit of account is bitcoin, the U.S. dollar has been rapidly inflating against bitcoin for 11 years. No, it hasn\u2019t been a smooth ride. <\/p>\n

No need to panic but newsflash: The U.S. dollar has been drastically inflating against bitcoin for quite some time now. I admit this reality is a tough pill to swallow. You might want to get some just in case the dollar keeps inflating. <\/p>\n

Bitcoin Is Savings Technology Not An Investment<\/h2>\n

There is a reason why many companies and people keep accumulating more bitcoin while the price goes lower. Even the framing of bitcoin as being in a bull or bear market is completely off the mark because it implies bitcoin is an investment. There are plenty of people who believe bitcoin is an investment. I\u2019m not one of them. However, if you view bitcoin as savings technology, then the current season is a value-discovery period for the only digital money that has existed for at least a decade and has gained 29,000 times more value than the world\u2019s reserve currency. You might want to get some just in case. <\/p>\n

\n

\u201cHumanity and our world has many problems \u2026 bitcoin isn\u2019t one of them.\u201d \u2013Erin Crawford<\/p>\n<\/blockquote>\n

This is a guest post by Mark Maraia. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or <\/em>Bitcoin Magazine.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

On a zoomed-out scale, the U.S. dollar has been rapidly inflating against bitcoin since the time one bitcoin reached parity with one dollar in 2011.<\/p>\n","protected":false},"author":2547,"featured_media":3498,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[1918,144,690,59,354],"class_list":{"0":"post-8636","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-hedge","9":"tag-hyperinflation","10":"tag-inflation","11":"tag-opinion","12":"tag-real-estate"},"author_data":{"id":2547,"name":"Mark Maraia","nicename":"mark-maraia","avatar_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/12\/mark-maraia-photo-96x96.jpg"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/money-on-fire.png","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/8636","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/2547"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=8636"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/8636\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/3498"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=8636"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=8636"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=8636"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}