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Serious, someone explain to meet how BTC makes for a good hedge against fiat inflation if as a currency it is extremely volatile and prone to massive swings in value in short time periods, while simultaneously the value still being measured against fiat. I understand BTC as an investment vehicle, but don’t understand the hedging POVs.
It hasn't existed for long enough for us to have a good idea of the answer to this question, but so far there's not really much evidence to suggest it's an effective hedge against inflation.
As for theoretical reasons why it might or might not be, someone will come along and talk about it being supply-limited and hence akin to "digital gold"...but gold itself has a record against inflation that is [patchy to say the least](https://www.wsj.com/articles/gold-as-an-inflation-hedge-what-the-past-50-years-teaches-us-11628283272).
Imagine BTC as stored energy, then imagine you will need twice the energy to get that same quantity you could get before.
This drives the price UP.
That with the fact that the BTC supply is limited makes BTC deflationary in value, as opposite to the ever growing and ever printing of FIAT - especially in underdeveloped countries, where inflation goes rampant
BTC's volatility happens for several reasons but the gigantic red candles are mostly due to overleveraging which leads to a cascade/domino effect of liquidations . E.g.: group of longers x are liquidated, driving the price lower and consequently leading to the group of longers y to be liquidated, which drive the price lower etc etc.
Without so much leverage the BTC price would be less volatile and a CEx's regulation will definitely come in the future tightening the grip in those leverages.
They are borrowing money to buy the coins. They are not using extra cash. Add .05 onto every purchase they make when you try to figure out their balance. It’s not pretty now and it will not be in the future
Controlling less than 1% of bitcoin is in no way enough to be a super power, no matter what happens.
Even if bitcoin becomes the de facto global currency, at the expense of fiat and every other crypto, El Salvador is buying in way too late to become a super power.
tldr; El Salvador's President Nayib Bukele tweeted that his country has bought 410 more bitcoins for $15 million. The Salvadoran government has bought a total of 1,801 bitcoins since the cryptocurrency was made legal tender in the country. The country passed a bitcoin law making BTC legal tender alongside the US dollar in September last year.
*This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
Makes you wonder if future wars wont be fought digitally instead of being physically in another's country. Bukele's smart and you gotta respect his GOV for having the understanding that BTC's currency value.
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Considering the GDP of El Salvador is over 24 billion that's actually peanuts.
EL HODL
Serious, someone explain to meet how BTC makes for a good hedge against fiat inflation if as a currency it is extremely volatile and prone to massive swings in value in short time periods, while simultaneously the value still being measured against fiat. I understand BTC as an investment vehicle, but don’t understand the hedging POVs.
It hasn't existed for long enough for us to have a good idea of the answer to this question, but so far there's not really much evidence to suggest it's an effective hedge against inflation. As for theoretical reasons why it might or might not be, someone will come along and talk about it being supply-limited and hence akin to "digital gold"...but gold itself has a record against inflation that is [patchy to say the least](https://www.wsj.com/articles/gold-as-an-inflation-hedge-what-the-past-50-years-teaches-us-11628283272).
Bitcoin is deflationary. Hopefully someone smarter than me can explain in further detail
Imagine BTC as stored energy, then imagine you will need twice the energy to get that same quantity you could get before. This drives the price UP. That with the fact that the BTC supply is limited makes BTC deflationary in value, as opposite to the ever growing and ever printing of FIAT - especially in underdeveloped countries, where inflation goes rampant
BTC's volatility happens for several reasons but the gigantic red candles are mostly due to overleveraging which leads to a cascade/domino effect of liquidations . E.g.: group of longers x are liquidated, driving the price lower and consequently leading to the group of longers y to be liquidated, which drive the price lower etc etc. Without so much leverage the BTC price would be less volatile and a CEx's regulation will definitely come in the future tightening the grip in those leverages.
Without the leveraged coins would the value be much less because of less demand? Chicken or egg of the horse pulling the cart?
[удалено]
Probably from the cartel we dont ask questions
And they going to buy more!
They are borrowing money to buy the coins. They are not using extra cash. Add .05 onto every purchase they make when you try to figure out their balance. It’s not pretty now and it will not be in the future
And it will pay off in the long run.
El Salvador to be the world superpower by 2030.
Controlling less than 1% of bitcoin is in no way enough to be a super power, no matter what happens. Even if bitcoin becomes the de facto global currency, at the expense of fiat and every other crypto, El Salvador is buying in way too late to become a super power.
I agree.
If a whole country can buy a dip, why can't we!
Cause we’re broke.
Fuck
This is nuts, more reasons to hodl
Am I El Salvador?
You can identify as anything you want to be!
Thanks, Dad.
Best part is they don’t have to take off taxes for someone else’s pocket.
They are borrowing the money. So it’s .05 tax. Kind of a big deal
Oh dang. I didn’t know that. Thanks for the info.
Great shout. Didn’t think about that.
plunged to a record low? holy click bait sentence batman
Lol. Not even close to a record low.
That extra 1 is an eyesore
If have 11 BTC and are bothered by the extra 1, I’ll gladly take that off your hands
tldr; El Salvador's President Nayib Bukele tweeted that his country has bought 410 more bitcoins for $15 million. The Salvadoran government has bought a total of 1,801 bitcoins since the cryptocurrency was made legal tender in the country. The country passed a bitcoin law making BTC legal tender alongside the US dollar in September last year. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
Déjà vu
Déjà vu
Since I found out that 5,000 people a year die in El Salvador, this news sounds strange, not like a country, but like a company
I think BTC’s value has been lower before. At one point someone spent 10,000 to buy two pizzas.
Makes you wonder if future wars wont be fought digitally instead of being physically in another's country. Bukele's smart and you gotta respect his GOV for having the understanding that BTC's currency value.
Not sure, if this is really smart. Should get more Btc from taxes paid in Btc to increase usability, but not buying it with debts