Crypto millionaire and Binance founder, Changpeng CZ Zhao, has proposed crypto as one way to fight inflation. His millionaire friend, Michael Saylor also supported the statement which views Bitcoin as the perfect inflation hedge.
In his recent tweet, the crypto millionaire stressed that inflation is something that is hard to deal with. However, one does not have to fight inflation if they own crypto.
CZ also said, “You can’t beat inflation. But you can fight it when you only have crypto ”.
The assertion caught the attention of MicroStrategy founder - the largest institutional investor in Bitcoin, Michael Saylor. Saylor noted that one only needs to own Bitcoin to remain relevant and unaffected by inflation.
“Sail your ship with your Bitcoin and let the winds of inflation carry you”, said Michael Saylor.
The discourse of the two crypto millionaires has been confirmed by recently published inflation statistics. Based on data from the Bureau of Labor Statistics, inflation in the United States for December reached a nearly 40 -year high. Data shows year after year, prices of consumer goods rose 7% in December. The surge was driven mainly by rising costs of energy, housing, used cars and food.
A rise of 7% marks the fastest year-on-year rise in US inflation since 1982. Last December, although it was a new high in inflation, it was not the only month that had recorded alarming inflation figures. The inflation rate has exceeded 5% for 8 consecutive months in the last year, and based on forecasts it is likely to continue to rise in 2022.
The Federal Reserve has responded to rising inflation, although it has recently stopped describing the situation as temporary. In a recent statement, Fed chairman Jerome Powell stated that the central bank will raise interest rates to fight inflation. Powell warned that the Fed will likely do up to three times the interest rate hike by 2022 if it sees it needed.
“If we see inflation continuing at higher levels longer than expected then we need to raise interest rates more often over time,” Powell said.
The Fed first revealed its plans to raise interest rates in the minutes of a meeting held in December. The document caused some turmoil in the crypto market and has been cited as one of the reasons for the recent collapse of the crypto market. Since the minutes of the meeting were released, Bitcoin has fallen from the $ 46,000 level to $ 39,000.
The Bitcoin price volatility that accompanies the Fed’s announcement has made some observers in traditional markets question whether Bitcoin is a credible inflation hedge.
Bitcoin proponents such as Michael Saylor, Bill Miller, and Ray Dalio, however, do not doubt the hedging potential that Bitcoin offers as shown in their investment strategies. Despite volatility in the short term, Bitcoin has shown impressive performance in the long term. This is why more institutional investors, high -income individuals, and even retailers are showing increased investment preferences in Bitcoin over fiat currencies.
