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on november 11th bitcoin put in an
all-time high just south of 70 000
before losing 37 of its value in the
next two weeks
the recent volatility has reignited the
debate as to what exactly bitcoin is and
what its function will be going forward
often you hear the argument that bitcoin
is a dollar in inflation hedge then
other times it seems to trade lockstep
with speculative risk assets like stocks
if bitcoin is indeed a dollar hedge then
two things seem to be working in its
favor
number one the continued parade of
institutional adoption which now
includes talk from several major
american city mayors regarding branching
into the bitcoin world and two the
finite nature of bitcoin which becomes
increasingly important as demand rises
and becomes somewhat nearer to the point
where all bitcoin will be mined
currently 90 of the 21 million coins
have been mined now bitcoin is going to
be a proxy for fiat currency then this
feature needs to be balanced against the
dollar's increasing supply m2 money
supply has increased by 38
beginning of the pandemic alone and
shown no signs of slowing down
the bitcoin faithful will argue that an
instrument whose supply can be increased
on a whim will eventually see a dilution
of value
and in steps bitcoin to fill that void
of course only time will tell
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