Bitcoin May Trump the Dollar as Hedge Against Inflation

Bitcoin May Trump the Dollar as Hedge Against Inflation

Bitcoin appears to be a good hedge against inflation because, unlike government-issued fiat currencies such as the U.S. dollar, the British pound, and the euro, supply of the crypto-currency is limited.Typically, limited supply and strong demand drives the price higher.Unlike the U.S. Federal Reserve, the nation's central bank, there is no overarching digital authority that can undercut the value of Bitcoin by flooding the market.As President Richard Nixon boards the White House helicopter, he smiles and gives the victory sign after resigning the presidency.

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President Richard Nixon took the dollar off the gold standard in 1971. Some believe this effectively made the dollar's value an article of faith.From 1975 to just before the COVID-19 pandemic hit in March 2020, the U.S. money supply has increased from about $273.4 billion to about $4 trillion. It increased to about $6.5 trillion last November, largely thanks to coronavirus stimulus bills intended to keep the economy running.President Joe Biden has proposed a new stimulus package totaling $1.9 trillion. If signed into law, more than half of the total supply of dollars would have been printed since the pandemic struck.Some fear that an increased number of dollars chasing limited goods and services will lead to future