CME Group’s chief economist and managing director, Bluford Putnam, recently acknowledged that Bitcoin is competing with gold as a hedge against inflation.
“Gold appears to have an emerging competitor in Bitcoin,” told Bloomberg for a video released on YouTube on Tuesday. “Given the current price range for gold, it is likely that increased production will be a feature of 2021,” he said.
Gold’s supply is less clearly defined than Bitcoin’s. Built into the asset’s code, BTC touts a set maximum limit of 21 million coins, dispersed into circulation on a steady mining schedule. Putnam mentioned this characteristic of Bitcoin in his rationale, although he also noted the coin’s volatile nature. “Please be aware, fixed supply does not mean less volatility,” he explained. “Indeed it can mean the opposite,” he said, adding:
“When the supply is relatively inelastic, then the dynamics of shifting patterns with demand can have very large and abrupt impacts on prices. Bitcoin has illustrated this point.”
A store of value or hedge often represents a place to put value on a longer-term basis as possible protection against inflation and shifting global economic factors. Lack ofTitle: CME chief economist hints Bitcoin is gaining ground on gold as a hedge
Sourced From: cointelegraph.com/news/cme-chief-economist-hints-bitcoin-is-gaining-ground-on-gold-as-a-hedge
Published Date: Wed, 03 Feb 2021 20:45:00 +0000