Opinion by: Jupiter Zheng, partner liquid fund at Hashkey Capital
Whenever Bitcoin falls, the narrative is always the same: it fails as a fence against inflation. In the eyes of critics, Bitcoin is not the “digital gold” that many others say.
With the golden whipping all the time high, these critics grow stronger. If bitcoin is an inflation fence, they will ask, why not even rally while investors are looking for safety?
Even today, the high inflation environment, the reality of the cardinal: Bitcoin is an inflation fence-may be the most important one for the long-term protection of capital that the world has seen.
Strength in deficiency
Bitcoin has a hard cap of 21 million coins, with full circulation expected by 2140. The built-in scarcity gold mirrors, with history served as an inflation fence. Bitcoin has released gold for many seasons, such as the Covid-19 season, when global markets are flooded with liquidity.
Like gold, Bitcoin works as an inflation hedge in the long run, not the short time. Critics are focused on short -term volatility and ignore greater trends. Bitcoin continues to be used as a store of value during the extended period of money printing.
Bitcoin is not controlled by any central bank or politician. It is a decentralized, peer-to-peer system governed by mathematics and agreed-not through election or political pressure cycles. In places like Zimbabwe or Venezuela, where governments broke their currencies, Bitcoin offered a more stable alternative. When faith in traditional systems weakens, bitcoin often strengthens.
Combines centralization
The value of bitcoin is not just its price – it’s in the design. Countries such as the US, EU, UAE, Singapore, and Hong Kong have advanced regulations around Bitcoin, but its relevance is more than the economies.
Inflation is a hassle in wealthy countries – rising grocery bills and pricier eggs. In difficult economies, inflation can signal political and financial collapse. Bitcoin offers a way. This is no longer theoretical – it happens in real life.
During the Greek crisis, citizens used Bitcoin to miss capital controls. In Venezuela and Argentina, where national currencies lost, Bitcoin became a tool for survival. People used it to maintain wealth, access global markets, and transact decentralized exchanges.
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The infinite bitcoin, the environment that is resistant to censorship is critical. It does not rely on the decisions of any an institution. It is protected from debt finances, interest rate manipulation, and geopolitical pressure. Bitcoin runs in consensus, not command.
Most consensus if trust in institutions is low. This inability is a characteristic that investors are undervaluing – and may not be appreciated until they need it more.
Portability is power
Bitcoin’s stability is also important in developed markets – especially if traditional systems fail. Banks may have fallen. Stock markets can crash. Payment processors can be offline. Bitcoin is not sleeping. It runs 24/7, 365 days a year.
With the fall of the Silicon Valley Bank in March 2023, Bitcoin jumped 23% while investors sought safety outside the traditional banking system. The existence and freedom of bitcoin has become its advantage.
With a bank failure like the Lehman Brothers in 2008, consumers may lose access to their funds for months or even years. Bitcoin, held in self-custody, remains in your control-as long as you have private keys. No third party is required.
Payment networks such as Visa or Swift can also be chokepoints – and targets for hackers who want to disrupt global payment infrastructure. Bitcoin is not subject to bottlenecks. Miners, not banks, i -verify it. While congestion can slow the transactions, scale solutions are emerging to improve speed and cost.
The digital nature of bitcoin makes it especially important during the controls of capital, inflation, or crisis. It is difficult to seize, subtract, or refree – which gives individuals more autonomy than allowable financial systems.
A more annoying term:
Based on these qualities, Bitcoin cannot deny a fence against inflation. Maybe we need a better term for Bitcoin’s key role in our financial future.
A more accurate term can be imaginary fence-it offers long-term protection thanks to lack, consent and decentralization.
However, adoption and price volatility are still obstacles to Bitcoin dethroning gold as a true global inflation fence. However, there are encouraging signs. Companies such as Strategy, Gamestop, Block and Massmutual have added Bitcoin to their balance sheets as a Treasury approach – including some estimates Pointing to one of the four companies in the S&P 500 following a suit of 2030. Many more governments the Exploration of bitcoin reserves.
As a conceptual fence, bitcoin shines during inflation, lowering of money, or systematic instability. This is not a cure-all. Its effectiveness depends on user education, internet access, and geopolitical context. If the connectivity disappears in full – say, during a nuclear war – there will be a bigger problem than inflation.
Bitcoin is best understood as a financial lifeboat. This is not perfect. It takes an effort to use it correctly. It is a small measure of preparation for unknown lives. But when the ship starts to sink, you want you to have one.
Opinion by: Jupiter Zheng, partner liquid fund in Hashkey Capital.
