Bitcoin was looking good as an inflation hedge — then it plunged nearly 20%

Bitcoin was looking good as an inflation hedge — then it plunged nearly 20%

When the shocking October inflation numbers first flashed through to traders' screens, showing US prices were rising at the fastest rate in 31 years, . To many crypto fans, the token's gains confirmed what they'd long argued: is the new inflation hedge on the block, and it's "digital gold" for the 21st century that will soon be a key diversifier in portfolios around the world. But that logic sustained some heavy fire in the last few days when bitcoin's price plunged 18%, from a record high of above $68,600 on November 10 to on Friday. The inflation-hedge narrative "should come with some very big caveats," said James Malcolm, a top currency strategist at investment bank UBS. "It's not a robust way of thinking about things." Although bitcoin was originally intended to be a digital version of cash, these days crypto investors are more likely to tell you that it's digital gold. Like the precious metal, there's a limited supply of bitcoin. Only 21 million coins are supposed to ever be minted, with 18.9 million already in existence. That scarcity should help the cryptocurrency hold its value over the long run, or so the argument goes, even as other assets wobble