“We believe the perception of bitcoin as a better inflation hedge than gold is the main reason for the current upswing, triggering a shift away from gold ETFs into bitcoin funds since September,” analysts at JPMorgan said in a note last week as bitcoin hit a new record at almost $67,000.
This built-in limit was a repost to quantitative easing: in 2008 when bitcoin was created, central banks were printing hundreds of billions to prop up the financial system, devaluing currencies around the world at the same time.
Hedge fund billionaire Paul Tudor Jones said this month that bitcoin was his preferred way to guard against inflation, telling CNBC it was “winning the race against gold”.
At least part of bitcoin’s price is underpinned by the fact that many holders — or HODLers as they dub themselves — don’t sell.