Bitcoin won't hedge inflation until it hits 1B wallets: Scaramucci

• LUKE HUIGSLOOT
• 23 Aug, 2022

The Skybridge Capital CEO said Bitcoin needs much more proliferation before it can act as an inflation hedge.

Skybridge Capital CEO Anthony Scaramucci believes that while Bitcoin remains an attractive asset, it has not reached the “wallet bandwidth” required to be considered an inflation hedge.

The global investment management CEO of CNBC’s Squawk Box on Aug 22 said Bitcoin was still too much of “an early adopting technical asset."

which would need to be held in around a billion wallets before it would begin to act as a hedge against inflation.“Until you get into the billion, billion-plus zone, I don’t think you’ll see Bitcoin as an inflation [hedge] as it’s still an early adopting technical asset.”

While the exact number of Bitcoin wallets worldwide is unknown, estimates place this number at approximately 200 million. In its earlier years, some touted Bitcoin as a potential hedge against inflation, given its fixed supply of 21 million coins.
 

However, according to a new IMF report, this narrative has changed over time as Bitcoin has been observed as being increasingly correlated to the stock market.

Scaramucci said he was still bullish on Bitcoin and the overall crypto market, pointing to recent moves from BlackRock to launch a new private spot Bitcoin trust with Coinbase as the custodian, a sign there is institutionalised solid demand for the leading cryptocurrency.

Scaramucci believes that the markets are currently filled with a ton of short positions, which could result in people getting “their faces ripped off when they least expect it. Steven Lubka, managing director of private clients at Swan Bitcoin, argued that Bitcoin should still be considered an inflation hedge.
 

While Lubka agreed that Bitcoin has failed to act as an inflationary hedge during the global inflation events this year, he believes that this inflation has been predominantly caused by supply shocks rather than monetary expansion,

where Bitcoin can hedge against inflation more effectively. As of the time of writing, Bitcoin’s price is currently $21,406, down 69.01% from its all-time high of $69,045 on November 11 last year.

Also speaking on ‘Squawk Box’ on Monday, Coinshare’s chief strategy officer Meltem Demirors said she expects Bitcoin prices will continue to remain flat throughout the third quarter as the price correlation between tech equities and cryptocurrencies continues. - cointelegraph

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