Bitcoin (BTC) has usually been promoted as an inflation hedge, but amid the worst years in over a decade of growing inflation worldwide, the bear market surged for the leading cryptocurrency that has been outperformed by other inflation hedge assets in the short term.
In this context, the Frax Price Index (FPI) — a token created in the Frax Finance ecosystem supposedly pegged to the US CPI — seems to be outperforming Bitcoin by close to 40% since its deployment, from the end of September 2022 to press time.
FPI price chart since inception. Source: CoinMarketCap
Although it is still an experimental project that must be looked into with caution, the FPI performance against BTC can also pose as a valuable indicator of how Bitcoin has been performing as an inflation hedge in this last year.
XAU v. BTC performance (%) price chart. Source: TradingView
Bitcoin price analysis
Meanwhile, Bitcoin has lost around 45% of its value against the USD since the beginning of last year. Moving from $47,777 per unit to $26,117 by press time.
BTC since January 2022 price chart. Source: TradingView
However, BTC consolidated itself as the “best-performing asset” since the 2008 economic crisis, beating all other traditional financial products, which gave Bitcoin the validation of being a good inflation hedge long term. At least during a moment of economic expansion and wealth.
Further developments and demand dynamics over the leading cryptocurrency by market cap will settle whether Bitcoin can continue to be a good inflation hedge or not.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
