Yesterday I received the latest issue 81 of the Coin Metrics' State of the Network.
And finally there it is, Bitcoin's deflationary nature is finally being recognized and properly valued. The inherent scarcity model built in the Bitcoin algorithm and the finite supply are being now touted as the most effective hedge against inflation. Recently I commented on five reasons why the fundamentals behind Bitcoin are stronger than ever. I did not intend to list the reasons in order of importance, however reading back my comment it seems this way. I strongly believe that scarcity and the deflationary nature of Bitcoin remains its strongest and leading feature.
The report cites hedge fund manager Paul Tudor Jones, who claims that “we are witnessing the Great Monetary Inflation -- an unprecedented expansion of every form of money unlike anything the developed world has ever seen."
Central bank activity and never-ending QE measures have become quite a concern for all major economies and we see inflation forming in all kinds of assets. None of other assets however quite possess the scarcity feature of Bitcoin, which makes it the perfect candidate for hedging inflation.
Everyday we are witnessing more and more institutional involvement. JP Morgan again made an important statement and build an expectation that even slight institutional involvement and portfolio allocation could lead to additional USD 600 Billion demand in 2021 alone. This is close to double the current market cap of Bitcoin and further confirms the strong fundamentals behind Bitcoin and its status as the new digital gold.
Without offering investment advice, I am quite happy and I continue to accumulate and HODL!